For each situation briefly explain the appropriate accounting treatment and how the information would be presented in the financial statements.
Below are two independent situations:
1. On August 31, 2021, The Langley Hornets Lacrosse Club sold season tickets for the upcoming season.
The club sold 5,000 season tickets for $750.00 each. The Hornets play a 24-game schedule with ten
games played between October and December 31, 2021 and the remainder to be played in the period
from January to March 2022. The club’s year end is December 31. Prepare the
the sale of the season tickets on August 31 and any
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.
Required:
For each situation briefly explain the appropriate accounting treatment and how the information would
be presented in the financial statements.
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