Calculate what the revenue would be on the Income Statement for MarchCalculate what the deferred revenue would be on the Balance Sheet for MarchExplain what happens to revenue and deferred revenue as the months' progress.Explain when revenue can be recognized and why. Netflix Subscription Scenario:Assumptions5000 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 Subscriptionper MonthValueMonthJanuaryFebruaryMarchRevenue Recognition15Total180# of SubscriptionsSold50005000500015000MonthlyRevenue75,000150,000225,000Deferred Revenue825,0001,575,0002,400,000

Answer (1) ; Calculation of revenue for March : Particulars Amount March month subscription for…

Answered: Netflix Subscription Scenario:…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Calculate what the revenue would be on the Income Statement for March Calculate what the deferred revenue would be on the Balance Sheet for March Explain what happens to revenue and deferred revenue as the months' progress. 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
Revenue Recognition
15
Total
180
# of Subscriptions
Sold
5000
5000
5000
15000
Monthly
Revenue
75,000
150,000
225,000
Deferred Revenue
825,000
1,575,000
2,400,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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