The Maroon & Orange Gym,Inc

question 113

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 1,2015,the company sold a one-year membership and a two-year membership.The company should report as gross income from the two contracts:

• A)$1,200 in 2015.
• B)$960 in 2015.
• C)$180 in 2017.
• D)$780 in 2016.
• E)None of these.

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Definitions:

Carbon Dioxide

An odorless, colorless gas that is generated both by the burning of carbon and organic compounds and through breathing. It naturally exists in the air and plays a crucial role in photosynthesis, being absorbed by plants.

Non-Renewable Resources

Natural resources that cannot be replenished at a sustainable rate, such as fossil fuels and minerals.

Clear-Cutting

A forestry or logging practice where all trees in a designated area are uniformly cut down, often leading to significant ecological and environmental impacts.