Luna Interiors, Inc., a manufacturer and retailer of home furnishings and accessories, sells products through an exclusive network of approximately 27 design centers. All of Luna's products are sold by special order. Customers generally place a deposit equal to 25% to 50% of the purchase price when ordering. Orders take 4 to 12 weeks to be delivered. Selected fiscal-year information from the company's balance sheets is as follows ($ thousands):

Selected Balance Sheet Data
Account	20X2	20X1
Inventories	$11,349	$14,615
Customer deposits (deferred revenues)	$5,763	$5,104

Prepare entries using the financial statement effects template to record the following: a. In fiscal 20X2, Luna reported total sales revenue of $53,085 (thousand). Assume that the the company collected customer deposits equal to $15,750 (thousand) over the year. Prepare entries for the deposits and the sales revenue. Assume all balances due on completed customer orders are paid in cash. b. Luna's cost of goods sold for 20X2 was $24,003 (thousand). Prepare the adjusting entry to record inventory acquisitions. Assume all purchases are made on account.

		Balance Sheet				Income Statement
		Cash		Noncash				Contributed		Earned								Net
	Transaction	Asset	+	Assets	=	Liabilities	+	Capital	+	Capital				Revenues	-	Expenses	=	Income
a(1)	Collected customer deposits.	Answer		Answer		Answer		Answer		Answer				Answer		Answer		Answer
a(2)	Recognized income on completed orders.	Answer		Answer		Answer		Answer		Answer				Answer		Answer		Answer
b	Purchased inventory.	Answer		Answer		Answer		Answer		Answer				Answer		Answer		Answer

c. In which section of the balance sheet would Luna most likely report its Customer Deposits? AnswerCurrent assetsCurrent liabilitiesLong term assetsLong term liabilities