Improvements, a home improvement magazine, collected $960,000 in subscription revenue on June 30. Each subscriber will receive an issue of the magazine in each of the next 12 months, beginning with the July issue. The company uses the accrual method of accounting. What is the amount of Subscription Revenue that has been earned by the end of December? (Round any intermediate calculations to two decimal places, and your final answer to the nearest whole number.)
A) $400,000
B) $560,000
C) $960,000
D) $480,000

Question

Quizplus · Accepted Answer

To determine the amount of Subscription Revenue that has been earned by the end of December, we need to divide the total subscription revenue by the number of issues to be delivered, and then multiply it by the number of issues already delivered by that point.

Total subscription revenue = $960,000 
Number of issues to be delivered = 12 
Issues delivered by the end of December = 6 (July to December)

Therefore, Subscription Revenue earned by the end of December = ($960,000 / 12) x 6 = $480,000.

Hence, the correct answer is D.

Improvements, a Home Improvement Magazine, Collected $960,000 in Subscription Revenue