Aneen’s Video Mart sells one- and two-year mail order subscriptions for its video-of-the-month business. Subscriptions are collected in advance and credited to sales. An analysis of the recorded sales activity revealed the following:
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|
2005 |
2006 |
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|
Sales |
$420,000 |
$500,000 |
|
|
Less cancellations |
20,000 |
30,000 |
|
|
Net sales |
$400,000 |
$470,000 |
|
|
Subscriptions expirations: |
|||
|
2005 |
$120,000 |
||
|
2006 |
155,000 |
$130,000 |
|
|
2007 |
125,000 |
200,000 |
|
|
2008 |
140,000 |
||
|
$400,000 |
$470,000 |
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In Aneen’s December 31, 2006 balance sheet, the balance for unearned subscription revenue should be
- $495,000
- $470,000
- $465,000
- $340,000