Mckinnon enterprises owns a professional ice hockey team, the rockford penguins. the company sells season tickets for its upcoming season and receives $960,000 cash. the season starts january 1, 2018, with five home games occurring monthly over the next six months. how much revenue will mckinnon enterprises recognize from its season ticket sales through the end of april 2018?

$640,000 must be recognized by mckinnon enterprises from its season ticket sales through the end of April 2018.

Explanation:

IFRS 15 requires Revenue to be recognized when control related to goods or services is transferred to the customer.

Sales of tickets  received of $960,000 cash. Is a Deferred Revenue since control has not yet been transferred to the customers.

Revenue is recognized over time with each game played (hence transfer of control).

A total of 30 games are expected from the season ( five home games occurring monthly over the next six months).

By  the end of April, 30 the games played are 4× 5 = 20.

Thus the Amount of Revenue to be recognised is:

=20/30× $960,000

=$640,000

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