You are the regional sales manager for Lauren Delia News Company. Lauren is making adjusting entries for

Question:

You are the regional sales manager for Lauren Delia News Company. Lauren is making adjusting entries for the year ended March 31, 2021. On September 1, 2020, customers in your region paid $36,000 cash for three-year magazine subscriptions beginning on that date. The magazines are published and mailed to customers monthly. These were the only subscription sales in your region during the year.


Required:

1. What amount should be reported as cash from operations on the statement of cash flows for the year ended March 31, 2021?

2. What amount should be reported on the income statement for subscriptions revenue for the year ended March 31, 2021.

3. What amount should be reported on the March 31, 2021, balance sheet for unearned subscriptions revenue?

4. Prepare the adjusting entry at March 31, 2021, assuming that the subscriptions received on September 1, 2020, were recorded for the full amount in Unearned Subscriptions Revenue.

5. The company expects your region’s annual revenue target to be $9,000.

a. Evaluate your region’s performance, assuming that the revenue target is based on cash sales.

b. Evaluate your region’s performance, assuming that the revenue target is based on accrual accounting.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Accounting

ISBN: 978-1259964947

10th edition

Authors: Robert Libby, Patricia Libby, Frank Hodge

Question Posted: