erry’s Jellies sells one- and two-year mail-order subscriptions for its jelly-of

Question

erry’s Jellies sells one- and two-year mail-order subscriptions for its jelly-of-the-month business. Subscriptions are collected in advance and credited to sales. An analysis of the recorded sales activity revealed the following:

Required:
What amount of liability for unperformed obligations should Jerry’s Jellies report on its December 31, 2019, balance sheet?

2018 2019 Subscriptions sold $ 510,000 $ 620,000 Scheduled deliveries: 2018 $ 230,000 2019 195,000 $ 190,000 2020 85,000 250,000 2021 180,000 $ 510,000 $ 620,000

Explanation / Answer

Amount of liability for unperformed obligations =85000+250000+180000= $515000

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