Can you Explain how the numbers in the highlighted cells were calculated? Please and Explain what happens to revenue and deferred revenue as the months' progress for Netflix. Explain when revenue can be recognized and why.

 

Netflix Subscription Scenario: Assumptions 5000 Netflix subscriptions were sold in January, February, and March. A Netflix subscription is $15.00 per month. Each Subscriber paid the full year's subscription. What would the Revenue for March be? What would get recorded as Deferred Revenue for March? Subscription Value Annual Subscription per Month Value $ Month January February March 15 $ 180 # of Subscriptions Sold 5000 $ 5000 $ 5000 $ Monthly Revenue 75,000 $ 150,000 $ 225,000 $ Deferred Revenue 825,000 1,575,000 2,250,000