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

Question:

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, 2015, 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 2015 and 2016.

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...