134. In its 2004 annual report to shareholders, Pittsburgh Times Inc. Included the following disclosure:

REVENUE RECOGNITION

• Advertising revenue is recognized when advertisements are published, broadcast or when placed on the Company's Web sites, net of provisions for estimated rebates, credit and rate adjustments and discounts.

• Circulation revenue includes single copy and home-delivery subscription revenue. Single copy revenue is recognized based on date of publication, net of provisions for related returns. Proceeds from home-delivery subscriptions and related costs, principally agency commissions, are deferred at the time of sale and are recognized in earnings on a pro rata basis over the terms of the subscriptions.

• Other revenue is recognized when the related service or product has been delivered.

Also, the following information on its current liabilities was included in its comparative balance sheets:

	12/30/2004	12/30/2003
CURRENT LIABILITIES
Commercial paper outstanding	$158,300,000	$291,251,000
Accounts payable	$170,950,000	$174,552,000
Accrued payroll and other related liabilities	$81,299,000	$126,983,000
Accrued expenses	$160,867,000	$190,748,000
Accrued income taxes	$225,220,000	$ 9,852,000
Unexpired subscriptions	$61,706,000	$ 81,385,000
Current portion of long-term debt and capital lease obligations	$ 2,534,000	$ 2,599,000
Total current liabilities	$860,876,000	$877,370,000

Required:

Assuming that Pittsburgh Times Inc. collected $440,000,000 in cash for home delivery subscriptions during fiscal year 2004, what amount of revenue did it recognize during 2004 from this source? Show the relevant T-account information to support your answer.

Answer:

$459,679,000

Unexpired Subscriptions
	81,385,000	Beg. balance
Revenue earned ?	440,000,000	(also debit to cash)
	61,706,000	End. balance

Learning Objective: 3 Level of Learning: 3

135. In its 2001 annual report to shareholders, American Airlines Inc. Presented the following balance sheet information about its liabilities:

	12/31/2001	12/31/2000
CURRENT LIABILITIES
Accounts payable	$1,717,000,000	$1,178,000,000
Accrued salaries and wages	$681,000,000	$924,000,000
Accrued liabilities	$1,336,000,000	$1,143,000,000
Air traffic liability	$2,763,000,000	$2,696,000,000
Payable to affiliates, net	$66,000,000	$511,000,000
Current maturities of long-term debt	$421,000,000	$108,000,000
Current obligations under capital leases	$189,000,000	$201,000,000
Total current liabilities	$7,173,000,000	$6,761,000,000
LONG-TERM DEBT, LESS CURRENT MATURITIES	$6,530,000,000	$2,601,000,000