Jeremy is a calendar-year taxpayer who sometimes leases his business equipment to local organizations. He recorded the following receipts this year. Indicate the extent to which these payments are taxable income to Jeremy this year if Jeremy is (1) a cash-method taxpayer and (2) an accrual-method taxpayer.
Jeremy is a calendar-year taxpayer who sometimes leases his business equipment to local organizations. He recorded the following receipts this year. Indicate the extent to which these payments are taxable income to Jeremy this year if Jeremy is (1) a cash-method taxpayer and (2) an accrual-method taxpayer.
Chapter3: Computing The Tax
Section: Chapter Questions
Problem 27P
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![Required information
[The following information applies to the questions displayed below.]
Jeremy is a calendar-year taxpayer who sometimes leases his
business equipment to local organizations. He recorded the following
receipts this year. Indicate the extent to which these payments are
taxable income to Jeremy this year if Jeremy is (1) a cash-method
taxpayer and (2) an accrual-method taxpayer.
Note: Leave no answers blank. Enter zero if applicable.
a. $2,150 deposit from the Ladies' Club, which wants to lease a trailer. The club will
receive the entire deposit back when the trailer is returned undamaged.
Income under cash method
Income under accrual method](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2c3d5551-0f85-4c5e-b202-6a0d32e3b6d0%2F6237bfb8-9f36-4817-93e1-b254dd09c4e0%2Fwe3v3ab_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Jeremy is a calendar-year taxpayer who sometimes leases his
business equipment to local organizations. He recorded the following
receipts this year. Indicate the extent to which these payments are
taxable income to Jeremy this year if Jeremy is (1) a cash-method
taxpayer and (2) an accrual-method taxpayer.
Note: Leave no answers blank. Enter zero if applicable.
a. $2,150 deposit from the Ladies' Club, which wants to lease a trailer. The club will
receive the entire deposit back when the trailer is returned undamaged.
Income under cash method
Income under accrual method
Transcribed Image Text:b. $1,000 from the Ladies' Club for leasing the trailer from December of this year
through March of next year ($250 per month).
Income under cash method
Income under accrual method
Show Transcribed Text
c. $400 lease payment received from the Men's Club this year for renting Jeremy's
trailer last year. Jeremy billed the club last year, but recently he determined that the
Men's Club would never pay him, so he was surprised when he received the check.
Income under cash method
Income under accrual method
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