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Restatement of Previously Issued Consolidated Financial Statements | 12 Months Ended
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Mar. 31, 2020
Accounting Changes and Error Corrections [Abstract] |
Restatement of Previously Issued Consolidated Financial Statements | NOTE 2 – RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS The Company has determined that in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contract with Customers, the Company incorrectly accounted for the cost of its co-op promotion allowances (previously referred to as “cooperative advertising”) with its customers as selling expenses instead of a reduction in net sales for each of the years ended March 31, 2020 and 2019, as these co-op promotion allowances are not a distinct good or service and the Company cannot reasonably estimate the fair value of the benefit it receives from these arrangements. The effects of this accounting error do not impact the consolidated balance sheets, statements of cash flows and statements of shareholders’ equity for any current or past reporting period. The effects are confined to the consolidated statements of operations, and these notes to consolidated financial statements. The tables below set forth the consolidated statements of operations, including the balances as originally reported, adjustments and the as restated balances for each of the years affected: The Singing Machine Company, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS
|  | Originally Reported |  |  |  |  |  | As Restated |
|  | For the Year Ended |  |  |  |  |  | For the Year Ended |
|  | March 31, 2020 |  |  | Adjustment |  |  | March 31, 2020 |
Net Sales |  | $ | 41,418,304 |  |  | $ | (2,917,734 | ) |  | $ | 38,500,570 |
Cost of Goods Sold |  |  | 30,323,223 |  |  |  | - |  |  |  | 30,323,223 |
Gross Profit |  |  | 11,095,081 |  |  |  | (2,917,734 | ) |  |  | 8,177,347 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |  |
Selling expenses |  |  | 7,203,991 |  |  |  | (2,917,734 | ) |  |  | 4,286,257 |
General and administrative expenses |  |  | 6,564,422 |  |  |  | - |  |  |  | 6,564,422 |
Bad debt expense (recovery) |  |  | 302,333 |  |  |  | - |  |  |  | 302,333 |
Depreciation |  |  | 269,107 |  |  |  | - |  |  |  | 269,107 |
Total Operating Expenses |  |  | 14,339,853 |  |  |  | (2,917,734 | ) |  |  | 11,422,119 |
Loss from Operations |  |  | (3,244,772 | ) |  |  | - |  |  |  | (3,244,772 | )
Other Expenses |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  |  | (240,709 | ) |  |  | - |  |  |  | (240,709 | )
Finance costs |  |  | (13,333 | ) |  |  | - |  |  |  | (13,333 | )
Total Other Expenses |  |  | (254,042 | ) |  |  | - |  |  |  | (254,042 | )
Loss Before Income Tax Benefit |  |  | (3,498,814 | ) |  |  | - |  |  |  | (3,498,814 | )
Income Tax Benefit |  |  | 641,814 |  |  |  | - |  |  |  | 641,814 |
Net Loss |  | $ | (2,857,000 | ) |  | $ | - |  |  | $ | (2,857,000 | )
|  | Originally Reported |  |  |  |  |  | As Restated |
|  | For the Year Ended |  |  |  |  |  | For the Year Ended |
|  | March 31, 2019 |  |  | Adjustment |  |  | March 31, 2019 |
Net Sales |  | $ | 46,482,998 |  |  | $ | (2,284,830 | ) |  | $ | 44,198,168 |
Cost of Goods Sold |  |  | 34,709,799 |  |  |  | - |  |  |  | 34,709,799 |
Gross Profit |  |  | 11,773,199 |  |  |  | (2,284,830 | ) |  |  | 9,488,369 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |  |
Selling expenses |  |  | 5,117,235 |  |  |  | (2,284,830 | ) |  |  | 2,832,405 |
General and administrative expenses |  |  | 5,790,019 |  |  |  | - |  |  |  | 5,790,019 |
Bad debt expense (recovery) |  |  | (442,671 | ) |  |  | - |  |  |  | (442,671 | )
Depreciation |  |  | 259,662 |  |  |  | - |  |  |  | 259,662 |
Total Operating Expenses |  |  | 10,724,245 |  |  |  | (2,284,830 | ) |  |  | 8,439,415 |
Income from Operations |  |  | 1,048,954 |  |  |  | - |  |  |  | 1,048,954 |
Other Expenses |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  |  | (244,593 | ) |  |  | - |  |  |  | (244,593 | )
Finance costs |  |  | (13,334 | ) |  |  | - |  |  |  | (13,334 | )
Total Other Expenses |  |  | (257,927 | ) |  |  | - |  |  |  | (257,927 | )
Income Before Income Tax Provision |  |  | 791,027 |  |  |  | - |  |  |  | 791,027 |
Income Tax Provision |  |  | (159,480 | ) |  |  | - |  |  |  | (159,480 | )
Net Income |  | $ | 631,547 |  |  | $ | - |  |  | $ | 631,547 |

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