Reference no: EM132311810

Assignment -

Question 1: Revenue Recognition, Accounts Receivable, Uncollectible Accounts - New York Times

The New York Times Company is engaged in diversified activities in media such as newspapers, magazines, televisions and radio stations. For simplicity, assume that any unearned revenue is only due to newspaper subscriptions. Using the 2000 balance sheet and supplementary footnote, please answer the following questions. Assume that all numbers are in thousands.

1. When does the NY Times recognize revenue on the sale of newspapers? (Describe)

2. As of the end of 2000, what was the total value of newspaper subscriptions that NYTimes customers had paid, but that the NY Times had not yet recognized as revenue?

3. What percentage of its outstanding accounts receivable does the NYTimes not expect to collect?

4. Assume that sales of newspaper subscriptions during 2000 were $765,000. How much revenue did the NYTimes recognize in 2000 related to newspapers?

5. Assume that total revenues for the year 2000 were $3,490,000 (this includes the subscription revenue above, as well as revenue from other sources). Also, assume that the NYTimes wrote-off $37,000 of accounts receivable as permanently uncollectible during 2000.

a. How much did the NYTimes recognize as bad debt expense?

b. Approximately how long does it take them to collect money from their customers, on average? For simplicity, you can use the 'net' numbers in your calculations. Comment on whether this number is good or bad.

Question 2: New York Times - Long-Term Assets

Use the attached balance for the year 2000 to answer the following questions about long-term assets. For the following questions, assume that total depreciation expense for the NYTimes during 2000 was $155,000.

1. How much did the NY Times originally pay for all the buildings and equipment that it owned at December 31st, 2000?

2. Assuming that no land was sold during the year 2000, how much did the NY Times pay to purchase additional land during the year?

3. Assume that the NYTimes had purchased $185,300 in additional equipment during the year. Also assume that the only thing that the NYTimes sold was one piece of printing equipment for $191,171 in cash.

a) How much did the NYTimes originally pay for the piece of equipment that was sold?

b) At the time of sale, what was the accumulated depreciation on the piece of equipment that was sold?

Reminder! Assume depreciation expense for the year is $155,000.

Attachment:- Assignment File.rar