Uptown theatre has customers who prepay a total of $1,000 for season tickets to attend five upcoming shows. uptown dinner theatre collects the $1,000 in advance before the shows are performed. after three shows are performed, what should uptown theatre report on its income statement assuming it used the accrual basis accounting method?

$600 Revenue

Explanation:

As we see that the total amount received in advance is $1,000 for a total of 5 shows to be conducted.

That means on the basis of equivalent proportion the value of each show =

Thus, after performing 3 shows revenue shall be recognized for those 3 shows as the service has been performed.

= $200 3 = $600

Thus, total revenue to be shown in income statement after completion of 3 shows = $600, to be recorded based on accrual basis.

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