Question: Mega Fitness Inc operates fitness centers throughout the West

Mega Fitness, Inc., operates fitness centers throughout the Western states. Members pay a nonrefundable, initial fee of $100, as well as a monthly fee of $40. As an option, a member could reduce the monthly fee to $30 by increasing the initial fee to $300. The monthly fee is billed to the member near the end of each month and is due by the 15th of the following month. The only cost incurred by Mega when a new member joins a center is the cost of issuing a laminated identification card with the member's picture. The card costs $3 to produce.

When should Mega Fitness recognize revenue for the initial fee and for the monthly fee?

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  • CreatedJune 24, 2013
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