Sally's Choice sells season memberships for $200 each.During January 2017,60 season memberships were sold.As of March 31,2017,$3,000 of season membership fees had been collected from customers.The season runs for four months starting March 1,2017.Which one of the following is an amount reported on the financial statements for the period ending March 31,2017?

Question

Quizplus · Accepted Answer

Sally's Choice sold 60 season memberships at $200 each, totaling $12,000 ($200 x 60). By March 31, 2017, they collected $3,000, leaving $9,000 ($12,000 - $3,000) unearned because the service (the season) had just begun and would not be fully earned until the end of the season. Thus, this amount represents unearned membership revenue.

Sally's Choice Sells Season Memberships for $200 Each