Andrew owns 100% of the stock of Crows Farm Inc., an S corporation, that raises cattle and corn. The farms annual gross receipts have never exceeded $23 million and the farm is not considered a tax shelter.

a. The farm must report its sales and cost of goods sold using the accrual method because inventories are material to the business.

b. The income from the farm may be reported using the cash method.

c. The income from the sales of cattle may be reported using the cash method, but the income from the sales of corn must be reported using the accrual method.

d. The income from the sales of corn may be reported using the cash method, but the income from cattle sales must be reported by the accrual method.

e. The farm must report its sales and cost of goods sold using the accrual method because Crows Farm is a corporation