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Adjusting entries

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An NBA basketball team sells season tickets worth $48 million before the basketball season starts late in the year. Assume this $48 million is debited to Cash and credited to Unearned Ticket Revenue. By the end of the calendar year, which also happens to be the end of the team's accounting period, 25% of the games have been played. What adjusting journal entry should be made at the end of the year?
A.Unearned Ticket Revenue, debit, $12 million; Cash, credit, $12 million.
B. Ticket Revenue, debit, 12 million; Unearned Ticket Revenue, credit, $12 million. C. Unearned Ticket Revenue, debit, $12 million; Ticket Revenue, credit, $12 million.
D. Ticket Revenue, debit, $12 million; Cash, credit, $12 million.
E. None of the above.

For the current period, a company's revenues and expenses are $480,000 and $420,000, respectively. What is the company's profit margin percentage for the current period?
A. 25.0%.
B. 87.5%.
C. 12.5%.
D. $60,000.
E. None of the above.

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Solution Preview

An NBA basketball team sells season tickets worth $48 million before the basketball season starts late in the year. Assume this $48 million is debited to Cash and credited to Unearned Ticket Revenue. By the end of the calendar year, which also happens to be the end of the team's accounting period, 25% of ...

Solution Summary

Response guides regarding adjusting entries are examined. Two adjusting entries are provided.

$2.19