Question

You are the regional sales manager for Weld News Company. Weld is making adjusting entries for the year ended March 31, 2015. On September 1, 2014, $ 12,000 cash was received from customers in your region for two- 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 2015 statement of cash flows?
2. What amount should be reported on the 2015 statement of earnings for subscriptions revenue?
3. What amount should be reported on the March 31, 2015, statement of financial position for deferred subscriptions revenue?
4. Prepare the adjusting entry at March 31, 2015, assuming that the subscriptions received on September 1, 2014, were recorded for the full amount in deferred subscriptions revenue.
5. The company expects your region’s annual revenue target to be $ 4,000.
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.


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  • CreatedAugust 04, 2015
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