A not-for-profit organization published a monthly magazine that had 15,000 subscribers on January 1,2011.The number of subscribers increased steadily throughout the year and at December 31,2011,there were 16,200 subscribers.The annual magazine subscription cost was $10 on January 1,2011 and was increased to $12 for new members on April 1,2011.Subscriptions are paid in full at the beginning of the member term.An auditor should expect that the revenue from subscriptions for the year ended December 31,2011,would be approximately
A) $179,400.
B) $171,600.
C) $164,400.
D) $163,800.

Question

Quizplus · Accepted Answer

To calculate the revenue from subscriptions for the year ended December 31, 2011, we need to calculate the total number of subscribers who paid $10 for the entire year (January-March) and the total number of subscribers who paid $12 for the entire year (April-December).

For January-March: 
Number of subscribers = 15,000 
Revenue per subscriber = $10 
Total revenue = 15,000 x $10 = $150,000

For April-December: 
Number of subscribers = 16,200 - 15,000 = 1200 
Revenue per subscriber = $12 
Total revenue = 1200 x $12 = $14,400

Total revenue for the year = $150,000 + $14,400 = $164,400

Therefore, the auditor should expect the revenue from subscriptions for the year ended December 31, 2011, to be approximately $163,800 (option D).

A Not-For-Profit Organization Published a Monthly Magazine That Had 15,000