Respuesta :
Answer:
$49,000
Explanation:
When an amount is received in advance for a service yet to be rendered or product yet to be delivered, an asset is recorded in form of cash and a liability in form of deferred or unearned revenue. As revenue is earned, it reduces the balance in the deferred revenue account (or subscription revenue received in advance).
Given that the Present Times Newspaper Company showed a $14,000 liability in its 2020 balance sheet for subscription revenue received in advance and During 2021, $60,000 was received from customers for subscriptions and the 2021 income statement reported subscription revenue of $25,000,
Closing balance in the subscription revenue received in advance account
= $14,000 + $60,000 - $25,000
= $49,000
Answer:
The liability for deferred revenue is $ 49,000
Explanation:
Computation for deferred revenue liability
The closing deferred revenue liability is calculated by the following equation.
Opening Deferred Revenue +Cash Subscriptions received - Subscription revenue = Closing Deferred Revenue
$ 14,000 + $ 60,000 - $ 25,000 = $ 49,000
Another approach is that out of the $ 60,000 received as cash, the earned revenue part was only $ 25,000 so the incremental $ 35,000 is added to the opening deferred revenue $ 14,000 to get the closing value of $ 49,000
