Question

McKinnon Enterprises owns a professional ice hockey team, the Rockford Penguins. The company sells season tickets for its upcoming season and receives $960,000 cash. The season starts January 1, 2018, with five home games occurring monthly over the next six months. How much revenue will McKinnon Enterprises recognize from its season ticket sales through the end of April 2018? A. $480,000 B. $640,000 C. $960,000 D. $320,000 E. None of the above

Answer 1

B. $640,000

Step-by-step explanation:

The computation of the revenue for April month is shown below:

= Cash received × (number of months ÷ number of months given)

= $960,000 × (4 months ÷ 6 months)

= $640,000

The 3 months is calculated from January 1 to April 30

Since we have to calculate for April month and 6 months received amount is given so we do the proportionate.