12. [Revenue and expense recognition: pricing season tickets - the Toronto Raptors, courtesy of Professor I. Krinsky]
Question:
12. [Revenue and expense recognition: pricing season tickets - the Toronto Raptors, courtesy of Professor I. Krinsky] The Toronto Raptors, a 1995 NBA expansion team, announced an elaborate season-ticket plan with a ticket price and vantage point to satisfy almost every need. Ticket prices range from $85 per game for 45 games-plus a one-time license fee of $8,750-for the best seats, to $10 per game-plus a one-time license fee of $750 for the cheapest seats; the team has eight ticket prices. The license fee. used for the first time by a sports team in Canada, entitles the holder to a de facto lease on the seat. The li- cense holder retains the right to buy the accompanying ticket and may sell that right to anyone at a mutually agreed-on price.
a. Discuss how the Toronto Raptors should recognize revenue from ticket sales and the license fee under this system.
Step by Step Answer:
The Analysis And Use Of Financial Statements
ISBN: 9780471375944
3rd Edition
Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried