61. Brown Thumb Landscaping is a calendar-year, accrual-method taxpayer. In September, Brown Thumb negotiated a $14,000 contract for services it would provide to the city in November of the current year. The contract specifies that Brown Thumb will receive $4,000 in October as a down payment for these services, and it will receive the remaining $10,000 in January of next year. a) How much income from this $14.000 contract will Brown Thumb recognize in the current year? Explain. b) How much income from this $14,000 contract will Brown Thumb recognize in the current year if it uses the cash method of accounting? 2 Wedne. Complete Sunday. he on your - 1-52, 1-5 hand as you hlutions 1-41 Business Income, Deductions, and Accounting Methods CHAPTER 1 c) Suppose that the total amount to be paid under the contract with the city is esti- mated at $14,000 but may be adjusted to $12,000 next year during the review of the city budget. What amount from the contract, if any, should Brown Thumb recognize as income this year? Explain. d) Suppose that in addition to the basic contract, Brown Thumb will be paid an additional $3,000 if its city landscape design wins the annual design competition next year. Should Brown Thumb accrue $3,000 revenue this year? Why or why not? 62. In January of year 0, Justin paid $4,800 for an insurance policy that covers his business property for accidents and casualties. Justin is a calendar-year taxpayer who uses the cash method of accounting. What amount of the insurance premium may Justin deduct in year 0 in each of the following alternative scenarios? a) The policy covers the business property from April 1 of year 0 through March 31 of year 1. b) The policy begins on February 1 of year 1 and extends through January 31 of LO 1-4 year 2. c) Justin pays $6,000 for a 24-month policy that covers the business from April 1, year 0, through March 31, year 2. d) Instead of paying an insurance premium, Justin pays $4,800 to rent his business property from April 1 of year 0 through March 31 of year 1. 63. Ben teaches golf lessons at a country club under a business called Ben's Pure LO 1-4