Prepare the journal entry to record the sale of the tickets

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Question - Below are two independent situations:

1. On August 31st, 2020, The Langley Hornets Lacrosse Club sold season tickets for the upcoming season. The club sold 4,000 season tickets for $500.00 each. The Hornets play a 24-game schedule with eight games played between October and December 31st, 2020 and the remainder to be played in the period from January to March 2021. The club's year end is December 31st.

Prepare the journal entry to record the sale of the season tickets on August 31st and any adjusting entries required on December 31st, 2020.

2. Burnaby Ltd. is involved in a pending court case. Burnaby's lawyers believe the company will likely have to pay between $500,000 and $750,000 to the plaintiff.

For each situation briefly explain the appropriate accounting treatment and how the information would be presented in the financial statements.

Reference no: EM133028828

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