Kirkland Theater sells season tickets for six events at a price of $240. In pricing the tickets, the planners assigned the leadoff event a value of $60 because the program was an expensive symphony orchestra. The last five events were priced equally; 1,500 season tickets were sold for the 2013 season.

Required:

a. Calculate the theater's earned revenue after the first three events have been presented.

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First you have to calculate the total price of the leadoff event, so $60 times $1,500 tickets equals Earned Revenue for the leadoff event.

Now you have to determine the cost of the other events. So start with the $240 ticket price minus the $60 leadoff event, times 1,500 tickets equals total amount paid for remaining 5 events. This is what should be in your Unearned Revenue account.

Now take the total amount paid for the remaining 5 events times 3/5 equals Earned Revenue. Finally add your two Earned Revenue amounts together to get your total Earned Revenue amount.

The fraction should be 2/5