Shea owns an exercise studio and uses the accrual method of accounting for her business. Shea sells
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Shea owns an exercise studio and uses the accrual method of accounting for her business.
Shea sells a punch card for $1,000, which grants customers access to 100 Zumba classes over a 36-month period. Shea sells a punch card to Kate in 20x1. Kate takes 30 classes in 20x1;
40 classes in 20x2 and 20 classes in 20x3. Kate was not able to attend the final 10 classes before the card expired. How will Shea report the $1,000 of revenue she earned from Kate’s punch card?
a. $300 in 20x1; $600 in 20x2
b. $300 in 20x1; $400 in 20x2; $300 in 20x3
c. $300 in 20x1; $700 in 20x2
d. $300 in 20x1; $400 in 20x2; $200 in 20x3
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Related Book For
Essentials Of Federal Income Taxation For Individuals And Business
ISBN: 9780808038009
15th Edition
Authors: Linda M. Johnson
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