Question regarding Assignment

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Anuj Joshi

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Sep 4, 2012, 8:01:44 AM9/4/12

to Rameshore Khanal, saimm...@googlegroups.com

Dear Sir,

While going through the assignments, the following doubts arose.

Problem 4-9 - Four star video

Adjustment (b)

In this adjustment, it talks about removal of "Video Inventory" due to the completion of useful life of a Title.

My question is, What is the classification of "Video Inventory"? Fixed Asset or Current Asset?

The company is in the business of Renting out Videos.

I've taken "Video Inventory" as a part of Current Asset and treated the loss of value as follows:

Video Inventory Consumption 2460

Video Inventory 2460

Adjustment (e)

This adjustment talks about discount subscription program and recognition of income from advanced received from customers

I've treated the adjustment as follows:

Customer Subscription 2440

Rental Revenue 2440

I've credited "Rental Revenue" since it is already in TB. Doubt is whether "Rental Revenue" is to be credited or a separate revenue account like "Subscription Revenue" needs to be credited?