The Cable TV Co., an accrual basis taxpayer, allows its customers to pay by the month ($10 each month), by the year ($110 per year), or two years in advance ($200). In December this year, the company collected the following amounts applicable to future services: January next year services (monthly contracts) $11,000 January - December next year Services (annual contracts) $44,000 January - December Services for the next two years $16,000 The income from the above that must be reported as gross income for this year is: $55,000. $71,000. $16,000. $27,000. None of the above
The Cable TV Co., an accrual basis taxpayer, allows its customers to pay by the month ($10 each month), by the year ($110 per year), or two years in advance ($200). In December this year, the company collected the following amounts applicable to future services: January next year services (monthly contracts) $11,000 January - December next year Services (annual contracts) $44,000 January - December Services for the next two years $16,000 The income from the above that must be reported as gross income for this year is: $55,000. $71,000. $16,000. $27,000. None of the above
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 21CE
Related questions
Question
The Cable TV Co., an accrual basis taxpayer, allows its customers to pay by the month ($10 each month), by the year ($110 per year), or two years in advance ($200). In December this year, the company collected the following amounts applicable to future services:
January next year services (monthly contracts) $11,000
January - December next year Services (annual contracts) $44,000
January - December Services for the next two years $16,000
The income from the above that must be reported as gross income for this year is:
$55,000.
$71,000.
$16,000.
$27,000.
None of the above
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
