In September of year 1, Jašon agrééd tó à čóntrăct in which he agreed to redo the floors in an office building and be paid $15,000 for the job. The owner of the office building gave Jason the first $5,000 payment toward the contract on the day the contract was signed. Jason started and completed the work in November of year 1. Upon completion of the project, Jason's bookkeeper mailed an invoice to the building owner for the balance owed, with a due date of February 15th of year 2. Jason received payment in full from the building owner in January of year 2. Jason uses the accrual basis method of accounting for both financial and tax reporting purposes. Which amounts should Jason report as income from this job when filing taxes in year 1 and year 2?
In September of year 1, Jašon agrééd tó à čóntrăct in which he agreed to redo the floors in an office building and be paid $15,000 for the job. The owner of the office building gave Jason the first $5,000 payment toward the contract on the day the contract was signed. Jason started and completed the work in November of year 1. Upon completion of the project, Jason's bookkeeper mailed an invoice to the building owner for the balance owed, with a due date of February 15th of year 2. Jason received payment in full from the building owner in January of year 2. Jason uses the accrual basis method of accounting for both financial and tax reporting purposes. Which amounts should Jason report as income from this job when filing taxes in year 1 and year 2?
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 58P
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Question
![In September of year 1, Jason agreed to a contract
in which he agreed to redo the floors in an office
building and be paid $15,000 for the job. The
owner of the office building gave Jason the first
$5,000 payment toward the contract on the day
the contract was signed. Jason started and
completed the work in November of year 1. Upon
completion of the project, Jason's bookkeeper
mailed an invoice to the building owner for the
balance owed, with a due date of February 15th of
year 2. Jason received payment in full from the
building owner in January of year 2. Jason uses the
accrual basis method of accounting for both
financial and tax reporting purposes. Which
amounts should Jason report as income from this
job when filing taxes in year 1 and year 2?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F15c22c02-a3a9-49b9-b857-642a5ba16fee%2Fdccd7d8d-37bd-4ee9-b8a3-798da1d915dc%2Fkwaltp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:In September of year 1, Jason agreed to a contract
in which he agreed to redo the floors in an office
building and be paid $15,000 for the job. The
owner of the office building gave Jason the first
$5,000 payment toward the contract on the day
the contract was signed. Jason started and
completed the work in November of year 1. Upon
completion of the project, Jason's bookkeeper
mailed an invoice to the building owner for the
balance owed, with a due date of February 15th of
year 2. Jason received payment in full from the
building owner in January of year 2. Jason uses the
accrual basis method of accounting for both
financial and tax reporting purposes. Which
amounts should Jason report as income from this
job when filing taxes in year 1 and year 2?
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