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Exercise 4-21 (Algorithmic) (LO.2) Bigham Corporation, an accrual basis calendar year taxpayer, sells its services under 12- and 24-month contracts. The corporation provides services to each customer every month. On July 1, 2020, Bigham sold the following customer contracts: Length of contract Total Proceeds 12 months $32,800 24 months $65,600 Determine the income to be recognized in taxable income in 2020 and 2021.

Exercise 4-21 (Algorithmic) (LO.2) Bigham Corporation, an accrual basis calendar year taxpayer, sells its services under 12- and 24-month contracts. The corporation provides services to each customer every month. On July 1, 2020, Bigham sold the following customer contracts: Length of contract Total Proceeds 12 months $32,800 24 months $65,600 Determine the income to be recognized in taxable income in 2020 and 2021.

FINANCIAL ACCOUNTING
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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Exercise 4-21 (Algorithmic) (LO.2) Bigham Corporation, an accrual basis calendar year taxpayer, sells its services under 12- and 24-month contracts. The corporation provides services to each customer every month. On July 1, 2020, Bigham sold the following customer contracts: Length of contract Total Proceeds 12 months $32,800 24 months $65,600 Determine the income to be recognized in taxable income in 2020 and 2021. Length of Contract 2020 Income 2021 Income 12 months 16,400 V $4 16,400 24 months 16,400 V 32,800 x
Transcribed Image Text:Exercise 4-21 (Algorithmic) (LO.2) Bigham Corporation, an accrual basis calendar year taxpayer, sells its services under 12- and 24-month contracts. The corporation provides services to each customer every month. On July 1, 2020, Bigham sold the following customer contracts: Length of contract Total Proceeds 12 months $32,800 24 months $65,600 Determine the income to be recognized in taxable income in 2020 and 2021. Length of Contract 2020 Income 2021 Income 12 months 16,400 V $4 16,400 24 months 16,400 V 32,800 x
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