s Daisy Corporation, a calendar year accrual method taxpayer, manufactures and sells life - like plastic flowersA. Daisy is sued by a customer, Catherine, who is injured in 2024 when she slips and falls on DaisyCorporation's sidewalk. Daisy Corporation settles the lawsuit in 2025 by agreeing to pay Catherine S100,000. The $100,000 payment is made to Catherine in 2026. in which year is the $100,000 deductible inDaisy Corporation's return? Please explain. B. Daisy offers to refund the price of a flower to a purchaser notsatisfied with their flower During 2024, 200 purchasers request a refund of the $100 purchase price. Daisyrefunds$10,000 on June 30, 2025 and $10,000 on November 15, 2025. Daisy timely files its federal incometax return for each taxable year on the extended due date for the return. Daisy adopted the recurring itemexception with respect to refunds. Explain when the $20,000 refund is deductible by Daisy.

1] Under the accrual method, you generally report income in the tax year you earn it, regardless of…

Answered: Daisy Corporation,

Business

Accounting

Daisy Corporation,

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Daisy Corporation, a calendar year accrual method taxpayer, manufactures and sells life - like plastic flowers
A. Daisy is sued by a customer, Catherine, who is injured in 2024 when she slips and falls on Daisy
Corporation's sidewalk. Daisy Corporation settles the lawsuit in 2025 by agreeing to pay Catherine S
100,000. The $100,000 payment is made to Catherine in 2026. in which year is the $100,000 deductible in
Daisy Corporation's return? Please explain. B. Daisy offers to refund the price of a flower to a purchaser not
satisfied with their flower During 2024, 200 purchasers request a refund of the $100 purchase price. Daisy
refunds$10,000 on June 30, 2025 and $10,000 on November 15, 2025. Daisy timely files its federal income
tax return for each taxable year on the extended due date for the return. Daisy adopted the recurring item
exception with respect to refunds. Explain when the $20,000 refund is deductible by Daisy.

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