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
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
Chapter7: Budgeting
Section: Chapter Questions
Problem 11EB: Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase,...
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Question
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.
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