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:

Chemical Hygiene Plan

A written program developed to ensure the safe use and handling of chemicals within a workplace.

Biohazard Safety

Procedures and practices that protect humans from exposure to biohazardous materials, including pathogens and biological wastes.

Centers For Medicare

Governmental agencies or departments responsible for administering Medicare, the federal health insurance program for eligible elderly and certain disabled individuals.

Medicaid Services

A program that provides health coverage to eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities in the U.S.