He 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, 2014, 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 2014.
(b) $960 in 2014.
(c) $180 in 2016.
(d) $780 in 2015.
(e) none of these.

Costco wholesale corporation operates membership warehouses selling food, appliances, consumer electronics, apparel and other household goods at 471 locations across the u.s. as well as in canada, mexico and puerto rico. as of its fiscal year-end 2005, costco had approximately 21.2 million members. selected fiscal-year information from the company's balance sheets follows. ($ millions). selected balance sheet data 2005 2004 merchandise inventories $4,015 $3,644 deferred membership income (liability) 501 454 (a) during fiscal 2005, costco collected $1,120 cash for membership fees. use the financial statement effectstemplate to record the cash collected for membership fees. (b) in 2005, costco recorded $46,347 million in merchandise costs (that is, cost of goods sold). record thistransaction in the financial statement effects template. (c) determine the value of merchandise that costco purchased during fiscal-year 2005. use the financial statementeffects template to record these merchandise purchases. assume all of costco's purchases are on credit.