[sheenbean8]

Modern Mother Magazine has received cash subscriptions on April 1, 2009 in the amount of $3,600,000 for the next three years. Their year-end is December 31, 2009. Magazine delivery occurs monthly and started on April 1, 2009. These were the only subscription sales for the year. Answer the following questions for the year ended December 31, 2009:
a. What amount of cash should be reported for the year on the statement of cash flows?
b. What amount of subscriptions revenue should be reported on the income statement?
c. What amount would be reported as unearned subscriptions revenue on the balance sheet as of December 31, 2009?

My Answers
a) $3,600,000
b) $300,000
c) $3,300,000

[pready]

B and C are incorrect. You should take $3,600,000 times 9 months divided by 36 months to get 9 months of subsripctions earned.

[sheenbean8]

So would B- be $900,000 and C-2,700,000

[pready]

You are correct.