The Maroon & Orange Gym,Inc

question 21

Multiple Choice

The Maroon & Orange Gym,Inc.,uses the accrual method of accounting.The corporation sells memberships that entitle the member to use the facilities at any time.A one-year membership costs $480 ($480/12 = $40 per month) ; a two-year membership costs $720 ($720/24 = $30 per month) .Cash payment is required at the beginning of the membership period.On July 1,2013,the company sold a one-year membership and a two-year membership.The company should report as gross income from the two contracts:

• A)$600 in 2013.
• B)$960 in 2013.
• C)$180 in 2015.
• D)$780 in 2014.
• E)None of the above.

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Definitions:

Stable Employers

Organizations that provide consistent employment opportunities over time, known for their financial stability, low staff turnover, and predictable demand for their products or services.

Employment Downsizers

Companies or managers that implement policies to reduce the workforce for cost-cutting or organizational restructuring purposes.

Progressive

Progressive refers to a tax system in which the tax rate increases as the taxable base amount (income or profits) increases, aimed at ensuring fairness by taxing individuals based on their capacity to pay.

Regressive

Pertaining to a tax system in which the tax rate decreases as the taxable amount increases, burdening proportionally more on lower-income earners.