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MacBook Problem Set 1: Course Outline and 4 Page 4 of 10 Scenario 2 Magazine subscriptions (14 points) On December 31, 2019, The Active Accountant

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MacBook Problem Set 1: Course Outline and 4 Page 4 of 10 Scenario 2 Magazine subscriptions (14 points) On December 31, 2019, The Active Accountant reported Deferred Subscriptions Revenue of $4,100,000. That balance included $2,830,000 for subscriptions to issues to be published in 2020 and $1,270,000 for issues to be published in 2021 During 2020, the magazine sold subscriptions for cash of $17,500,000 that consisted of: Por issues to be published in 2020 $9,850,000 For issues to be published in 2021 $5,360,000 For issues to be published in 2022 $2,290,000 Prepare the general journal entry to record the cash received for the subscriptions sold during 2020. Post the entry to the relevant T-account(s) on the following page and compute the resulting balance(s) at December 31, 2020 before adjustment. (2 points entry points for posting/balance) DATE ACCOUNT NAMES DEBIT CREDIT 2020 b. The Active Accountant produced all the 2020 issues and delivered the magazines to the subscribers. Prepare the necessary adjustment at December 31, 2020 in general journal form. Post the adjusting entry to the relevant T-accounts on the following page and compute the resulting balances at December 31, 2020 after adjustment. (4 points entry + 2 points for posting/balance) ACCOUNT NAMES DEBIT CREDIT DATE SUPPORTING CALCULATION REQUIRED: Problem Sete Course Outline .2 and 4 Page 19 Prepaid Subscriptions 2020 Subscriptions Revenue Deferred Subscriptions Revenue 4,100,000 12/31 2019 1/1 2020 Indicate the items and their amounts that The Active Accountant should have reported relative to subscriptions in its 2020 GAAP financial statements. (Ignore cash.) (4 points) Income Statement for the year ended December 31, 2020: Amount Balance Sheet at December 31, 2020: Amount

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