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:

Cool-Mist Vaporizer

A device that adds moisture to the air through the release of cool mist, often used to alleviate congestion or dryness in the respiratory tract.

Hearing Loss

Impairment of the ability to hear, which can vary from mild to profound, affecting one or both ears.

Conductive

Pertaining to the ability to conduct or transmit heat, electricity, or sound through a substance or medium.