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please help me solve these questions asap! When would AMC Theatres recognize revenue from its AMC Stubs A-List subscription service? AMC Entertainment Holdings, Inc. (NYSE:
please help me solve these questions asap!
When would AMC Theatres recognize revenue from its AMC Stubs A-List subscription service? AMC Entertainment Holdings, Inc. (NYSE: AMC), also known as AMC Theatres, recently announced a $19.95 per month subscription service, AMC Stubs A-List, to compete with MoviePass. With the A-List program, subscribers can see up to three movies per week with few restrictions. The minimum commitment is three months, after which time the subscriber can cancel at any time. Just as a point of comparison, the cost of MoviePass is between $7.95 $9.95 per month. Depending on the plan, MoviePass subscribers can see up to one movie per day, subject to restrictions. Subscribers can cancel at any time. MoviePass stock has fallen greatly in recent weeks because investors do not see its business model as sustainable. MoviePass has significantly more expenses than revenues and its cash is dwindling rapidly. Questions 1. Analyze the current financial position of MoviePass! 2. Assume that a new subscriber signs up for the AMC Stubs A-List program and pays $19.95 for the first month on August 1. Prepare the journal entry on August 1 and indicate the effects on the accounting equation and financial statements. 3. On what day will AMC be able to recognize that first $19.95 as revenue? Indicate the effects on the accounting equation and financial statements. 4. If AMC charges a new subscriber for the first three months (the minimum commitment) when the subscriber signs up for the A-List program, when will AMC recognize the revenue from the first three months for that new subscription? Prepare the journal entry for the three-month prepayment by AMC beginning August 1st. Indicate the effects on the accounting equation and financial statements Step by Step Solution
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