Bigham Corporation, an accrual basis calendar year taxpayer, sells its services under 12 month and 24 month contracts The corporation provides services to each customer every month On July 1, 2016, Bigham sold the following customer contracts Length of Contract Total Proceeds 12 months $14,000 24 m...

RevProc 200434 permits an accrual basis taxpayer to defer recognition of income for advance payments ...

Bigham Corporation, an accrual basis calendar year taxpayer, sells its services under 12-month and 24-month contracts. The

Question:

Bigham an accrual basis calendar year taxpayer, sells its services under 12-month and 24-month contracts. The provides services to each customer every month. On July 1, 2016, Bigham sold the following customer contracts:
Length of Contract ..............Total Proceeds
12 months ..................................$14,000
24 months ..................................$24,000
Determine the income to be recognized in taxable income in 2016 and 2017.
Length of Contract......... 2015 Income............... 2016 Income
12 months ............a. _______________ ........c. ______________
24 months ............b. _______________ ........d. ______________
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...