Question

A local theater company sells 1,500 season ticket packages at a price of $250 per package. The first show in the 10-show season starts this week. (a) The sale of the season tickets before the first show. (b) The revenue from fulfilling the performance obligation by putting on the first show.

Answer 1

Answer:

Dr cash    $375,000

Cr unearned revenue      $375,000

Dr unearned revenue     $37,500

Cr revenue                                    $37,500

Explanation:

The total amount realized from the sale of tickets is  $375,000($250*1500)

However,the cash proceeds should be debited to cash while it is also credited to unearned revenue

The revenue from fulfilling the performance obligation=1/10*$375,000=$37,500

The $37,500 is debited to unearned revenue and credited to sales revenue as that amount has now been earned

Answer 2

a) The cash realized from the sale for all the season tickets is $375,000.

b) The revenue to be recognized after fulfilling the performance obligation of the first show is $37,500.

Data and Calculations:

Selling price per ticket package = $250

Number of ticket packages sold = 1,500

Number of show seasons = 10

On the average, each show season will take = 150 tickets (1,500/10)

Proceeds from sale of season tickets = $375,000 ($250 x 1,500)

Revenue from first show = $37,500 ($375,000/10) or (150 x $250)

Learn more: https://brainly.com/question/21602595