Question
30. On December 15, 2021 Borst Law Firm received a $10,000 retainer from its client for legal services that will be rendered during January 2022.
30. On December 15, 2021 Borst Law Firm received a $10,000 retainer from its client for legal services that will be rendered during January 2022. What amount of this transaction will the company include in revenue on its accrual-basis income statement for the year ended December 31, 2021? A. $10,000 because the payment was received during 2021. B. $5,000 because the revenue should be evenly divided between December 2021 and January 2022. C. $0 because the services will not be rendered during 2021. D. None of the above is correct.
31. Skylars Aircraft Dealership, a company that buys and resells used aircraft, purchased a Cessna Citation jet for $750,000 on December 15, 2020. The company sold the aircraft to Buechler Corporation for $950,000 on April 1, 2021. What amount of gross profit from this transaction will Skylars Aircraft Dealership record on its accrual-basis income statement for the year ended December 31, 2021? A. $950,000 B. $750,000 C. $200,000 D. $0
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