Journal Entries for the Proportional Performance Method
The Skull Valley Angels is a minor league baseball team. The team has 60 home games during a season and sells season tickets for $500 each. For the most recent season, the Angels sold 2,000 season tickets. The total initial direct costs (in cash) related to the season tickets (including product giveaways for signing up early, costs of processing the transactions, and so forth) were $150,000. Direct costs (in cash) are $2 per customer per game. The team’s fiscal year ends on June 30. As of that date, 23 of the home games have been played. Make the journal entries necessary to record (1) the receipt of the cash for the 2,000 season tickets sold, (2) the payment (in cash) for the initial direct costs, and (3) the recognition of all season ticket revenues and expenses for the fiscal year.