Rovio Entertainment is a Finnish developer, publisher and distributor of video games headquartered in Espoo, Finland. Rovio was founded in 2003 by three students from Helsinki University of Technology following a victory in a developers competition with a multiplayer game called King of the Cabbage World, later renamed Mole War. Rovios games include Angry Birds, Bad Piggies, Shakira and Fruit Nibblers. Rovio produced The Angry Birds Movie and launched an entertainment channel, Toons.TV (discontinued in 2017). Rovio licenses its Angry Birds content to other distributors such as Activision and obtains licenses to produce games such as Angry Birds Star Wars. Rovio trades on the NASDAQ Helsinki stock exchange and reports in Euro. All amounts are in millions of Euro, rounded to hundreds of thousands. Please round to hundreds of thousands of euro (XX.X million). Assume a 25% tax rate throughout. Rovios fiscal yearend is December 31.

The following italicized text explains the basics of Rovios expense and revenue recognition based on their accounting policies footnote. Please read carefully! REVENUES Games: Rovios games are free to play, but Rovio makes money from in-application purchases. There are two different kinds of in-application purchases in Rovio games: consumables and durables. Consumables benefit the user immediately, while benefits from durables last across the user lifetime. Consumables satisfy revenue recognition at a point in time, i.e., when purchased by the player. Durables are recognized as revenue over time, i.e., over the estimated player lifetime. Durables always have a two-year life with half of the revenue recognized in the year of purchase and the other half in the following year.

Broadcasting: Broadcasting royalties are from The Angry Birds Movie and TV shows such as Piggy Tales and Angry Birds Blues. Columbia Pictures acts as a paymaster and manages all money flows in the broadcasting value chain. Rovio recognises its revenue earned from end-users when it is reported to Rovio by Columbia. Since Rovio is the residual receiver in the value chain, there is a significant delay between Columbia reporting the end-user purchase and Rovio receiving the cash, during which time the amounts are included in Broadcasting Receivables.

COSTS Movie: Rovios only movie to date is The Angry Birds Movie, released in 2016. The amortisation schedule of capitalised development costs (Development Costs, Movies, on the balance sheet) related to the Angry Birds Movie is based on the ratio of the revenue from the movie in a given period relative to the total expected revenue throughout the movies entire lifecycle. The total development costs of The Angry Birds Movie was 100. Games: Early stage research costs associated with games are expensed as incurred. Development costs are recognised as an intangible asset when Rovio can demonstrate the technical feasibility and intent to complete and market the project, as well as the probability of the asset generating future economic benefits. Game Development Costs are amortized straight-line over a two-year estimated useful life.

1. During 2018, Rovio receives game payments (in cash) of 193.2 of which 158.2 is for consumables and 35.0 is for durables. Durables always have a two-year estimated life, with half recognized in the year the payment is received and the remainder in the following year.

2. During 2018, Columbia reports to Rovio that Rovio has earned 125.0 from broadcasting royalties for 2018. The ending balance in Broadcasting Receivables at year-end 2018 totals 27.0.

Please help with Journal entry for Q1 &2