When will Maroon 5 recognize revenue from its 2018 concerts at Madison Square Garden in New York City?

During 2018, the band Maroon 5 is touring across the U.S. on its “Red Pill Blues Tour 2018.” Two of those concerts, on October 14 and 15, will be held at Madison Square Garden in New York City. Madison Square Garden has a seating capacity for concerts of approximately 19,000. According to a Business Insider article in December 2016, Maroon 5 had an average concert ticket price of $165.

Assume that these two Madison Square Garden concerts were sold out on the first day the tickets were available for sale to the public, November 4, 2017. Also assume, for the sake of simplicity, that all tickets are sold directly by Maroon 5.

Questions

  1. How much gross concert revenue will Maroon receive for the two Madison Square Garden concerts?
  2. How will Maroon 5’s balance sheet and income statement be impacted by the sale of the Madison Square Garden tickets on November 4, 2017? What specific accounts will be impacted and in what direction (increased or decreased)?
  3. How will Maroon 5’s balance sheet and income statement be impacted by the performance of the October 14, 2018, concert at the Madison Square Garden tickets?

Instructor Resources

These resources are provided to give the instructor flexibility for use of Accounting in the Headlines articles in the classroom. The blog posting itself can be assigned via a link to this site OR by distributing the student handout below. Alternatively, the PowerPoint file below contains a bullet point overview of the article and the discussion questions.

  • Student handout (pdf) (word) (contains entire blog posting + discussion questions)
  • PowerPoint file (brief article overview + discussion questions)

Copyright 2017 Wendy M. Tietz, LLC

About Dr. Wendy Tietz, CPA, CMA, CGMA

Dr. Wendy Tietz is a professor of accounting at Kent State University in Kent, Ohio, USA. She is also a textbook author with Pearson Prentice-Hall.

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