5-39 Prepaid Service Income: Accrual Method. a. LL Corporation, a calendar year and accrual basis taxpayer, is engaged in the lawn care business, providing fertilizer treatments. It sells one-, two-, and three-year contracts. Each contract provides that the customer will receive four treatments (fall, winter, spring, and summer). An analysis of its custom- er contracts revealed that it received $200,000 during the fall for a one-year contract. Each of these customers will receive one treatment in 2021 and three treatments in 2022. In its financial accounting statements, the company reports the income as services are performed. What amount of income must the corpo- ration report in 2021 and 2022? b. Same as (a) above except the contracts are for two years. The customers will receive one treatment in 2021, four treatments in 2022, and three treatments in 2023 c. A professional basketball team that reports on the calendar year and uses the accrual method collected $700,000 in pre-season ticket sales in August and September of 2021. Of its 41.game home season, 15 games were played prior to the end of the year. In its financial statements, the organization reports the income as the games are played. What amount must be included in income in 20212