Question
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
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 2018, the company collected the following amounts applicable to future services:
October 2018-September 2020 services (200 two-year contracts) $192,000
October 2018-September 2019 services (200 one-year contracts) 120,000
Total $312,000
As a result of the above, Orange Cable should report as gross income for 2019:
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Auditing Cases An Active Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
2nd Edition
0130674842, 978-0130674845
