Question
Based on 2019 sales of music recorded by an artist under a contract with Therese IndieMusic, the artist earned P200,000 after an adjustment of P16,000
Based on 2019 sales of music recorded by an artist under a contract with Therese IndieMusic, the
artist earned P200,000 after an adjustment of P16,000 for anticipated returns. In addition, Therese paid
the artist P150,000 in 2019 as a reasonable estimate of the amount recoverable from future royalties to
be earned by the artists.
What amount should Therese report in its 2019 income statement as royalty expense?
A. P200,000
B. P216,000
C. P350,000
D. P366,000
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Financial Accounting and Reporting
Authors: Barry Elliott, Jamie Elliott
17th edition
978-0273778172, 027377817X, 978-1292080505
