Carnival Corporation is the world’s largest cruise line company. Its printing costs for brochuresare initially recorded as Prepaid Advertising and are later charged to Advertising Expense whenthey are mailed. Passenger deposits for upcoming cruises are considered unearned revenue andare recorded as Customer Deposits as cash is received. Deposited amounts are later converted toCruise Revenue as voyages are completed.a. Where in its financial statements does Carnival Corporation report Prepaid Advertising?Where in its financial statements does it report Customer Deposits?b. Prepare the adjusting entry necessary when brochures costing $18 million are mailed.c. In its most recent annual report, Carnival Corporation reported Customer Deposits in excessof $2.8 billion. Prepare the adjusting entry necessary in the following year as $90 million ofthis amount is earned.d. Consider the entire adjusting process at Carnival Corporation. Which adjusting entrydo you think results in the most significant expense reported in the company’s incomestatement?
Carnival Corporation is the world’s largest cruise line company. Its printing costs for brochures
are initially recorded as Prepaid Advertising and are later charged to Advertising Expense when
they are mailed. Passenger deposits for upcoming cruises are considered unearned revenue and
are recorded as Customer Deposits as cash is received. Deposited amounts are later converted to
Cruise Revenue as voyages are completed.
a. Where in its financial statements does Carnival Corporation report Prepaid Advertising?
Where in its financial statements does it report Customer Deposits?
b. Prepare the
c. In its most recent annual report, Carnival Corporation reported Customer Deposits in excess
of $2.8 billion. Prepare the adjusting entry necessary in the following year as $90 million of
this amount is earned.
d. Consider the entire adjusting process at Carnival Corporation. Which adjusting entry
do you think results in the most significant expense reported in the company’s income
statement?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
