Question 13

Joes Cross Fit, an accrual-method taxpayer, provides personal training services. On September 30, 2019, Barbie pays Joes Cross Fit $2,400 cash for 24 months of personal training services ($100/month). Barbies training sessions beginning on October 1, 2019.

For book purposes, Joe's Cross Fit will recognize $300 in income in 2019, $1,200 in 2020, and $900 in 2021.

A) For tax purposes, how much of the $2,400 must Joes Cross Fit include in gross income in 2020?

B) For tax purposes, how much of the $2,400 must Joes Cross Fit include in gross income in 2021?