Tyler owns a tennis supply store. The Junior Tennis League pays Tyler $6,500 for specialty tennis racquets on December 15, XX03. Tyer ships the order on December 20th to the Junior Tennis League. The league contacts him on December 23rd and informs him 10% of the racquets are damaged. Tyler requests to inspect the racquets before authorizing the return. The league agrees to meet with Tyler to inspect the racquets and negotiate a solution after the holidays, on January 5, XX04. After the meeting, Tyler issued a refund of $650 to the league. Tyler reports on the accrual basis. How much income from the sale must Tyler report in the year ended December 31, XX03? Tyler must recognize the net amount, $5,850, as taxable income in XX03. O Tyler must recognize the entire $6,500 as taxable income in XX03 and deduct any refund when issued in XX04. Tyler does not have to report any of the sale as taxable income because it is still under negotiation at the end of the year. Tyler must recognize the $6,500 as taxable income and $650 as an expense in XX03.

Tyler owns a tennis supply store. The Junior Tennis League pays Tyler $6,500 for specialty tennis racquets on December 15,X03. Tyer ships the order on December 20 th to the Junior Tennis League. The league contacts him on December 23 rd and informs him 10% of the racquets are damaged. Tyler requests to inspect the racquets before authorizing the return. The league agrees to meet with Tyler to inspect the racquets and negotiate a solution after the holidays, on January 5, XX04. After the meeting. Tyler issued a refund of $650 to the league. Tyler reports on the accrual basis. How much income from the sale must Tyler report in the year ended December 31.03 ? Tyler must recognize the net amount, $5,850, as taxable income in 03. Tyler must recognize the entire $6,500 as taxable income in 03 and deduct any refund when issued in 04. Tyler does not have to report any of the sale as taxable income because it is still under negotiation at the end of the year. Tyler must recognize the $6,500 as taxable income and $650 as an expense in 03