Answered step by step
Verified Expert Solution
Question
1 Approved Answer
16. Orange Cable TV Company, an accrual basis taxpayer, allows its customers to pay by the year in advance ($600 per year) or two years
16. Orange Cable TV Company, an accrual basis taxpayer, allows its customers to pay by the year in advance ($600 per year) or two years in advance ($960). In September 2019, the company collected the following amounts applicable to future services: October 2019-September 2021 services (200 two-year contracts) $192,000 October 2019-September 2020 services (200 one-year contracts) 120,000 As a result of this, Orange Cable should report as gross income for 2020:
a. $54,000. b. $78,000. c. $258,000. d. $312,000. e. None of these
PLEASE EXPLAIN.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started