Winston Company Sells Magazine Subscriptions for One- to Three-Year Subscription

Multiple Choice

Winston Company sells magazine subscriptions for one- to three-year subscription periods. Cash receipts from subscribers are credited to Magazine Subscriptions Collected in Advance, and this account had a balance of $9,600,000 at December 31, 2011, before year-end adjustment. Outstanding subscriptions at December 31, 2011, expire as follows:

In its December 31, 2011, balance sheet, what amount should Winston report as the balance for magazine subscriptions collected in advance?

A) $2,000,000
B) $3,800,000
C) $7,600,000
D) $9,600,000