Title: Business Liability, reporting of earned Revenue, and Decision-makers' Information

Contents

1. A newspaper company collects money for subscriptions before its newspapers are physically delivered. How large is that liability, and when does it become revenue?
2. Go to http://www.nytimes.com/. At The New York Times Web site, scroll to the bottom of the screen and click on “The New York Times Company.” Click on “Investors” at the top of the next screen. Click on “Financials” on the left side of the next screen. In the center of the next page, click on “2010 Annual Report & Form 10-K” to download.
After the document has downloaded, scroll to page 63 to look at the company’s balance sheet. Does The New York Times Company report any unearned revenue within its liabilities?

3. Next, scroll to page 72. Within the notes to financial statements, a description is provided of the revenue recognition procedures used by The New York Times Company. What information is presented to decision makers by the last sentence in the fourth bullet point?

Number of words (answers): 201