In November and December Year 1, Dorr Co., a newly organized magazine publisher, received $72,000 for...
In November and December Year 1, Dorr Co., a newly organized magazine publisher, received $72,000 for 1,000 3‐year subscriptions at $24 per year, starting with the January Year 2 issue. Dorr elected to include the entire $72,000 in its Year 1 income tax return. What amount should Dorr report in its Year 1 income statement for subscriptions revenue?
Group of answer choices
1) $0
2) $ 4,000
3) $24,000
4) $72,000
Homework Answers
The answer is 1)$0
Income statement is prepared on accrual basis.
Since the revenue relates to next period, none of it is earned in current year and hence, 0 should be recognized as subscription revenue in Year 1
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In November and December Year 1, Dorr Co., a newly organized
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