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Business, 15.10.2019 00:00 eggg65

Molly operates a gym. she sells memberships that entitle the member to use the facilities at any time. a one-year membership costs $360 ($360/12 = $30 per month); a two-year membership costs $600 ($600/24 = $25 per month). cash payment is required at the beginning of the membership period. on july 1, 2019, molly sold a one-year membership and a two-year membership.

i. if molly is a cash basis taxpayer, her 2015 gross income from the contracts is $960 ($360 + $600).
ii. if molly is an accrual basis taxpayer, her 2015 gross income from the contracts is $330 [(6/12 × $360) + (6/24× $600)].
iii. if molly is an accrual basis taxpayer, her 2016 gross income from the contracts is $630 [(6/12)($360) + $450]

a) only i is true.
b) only i and ii are true.
c) only ii and iii are true.
d) i, ii, and iii are true.
e) none of the above.

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