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 2019, the company collected the following amounts applicable to future services:

October 2019-September 2021 services (200 two-year contracts) $192,000

October 2019-September 2020 services (200 one-year contracts) 120,000

Total $312,000

As a result of this, Orange Cable should report as gross income for 2020:

a. $54,000.

b. $78,000.

c. $258,000.

d. $312,000

Please Explain Your answer