On July 1, 2023, Tea, Inc. paid $19,500 for a service contract that covers their office computers, printers, and copiers from July 1, 2023 through December 31, 2024. How much of the payment can Tea, Inc. deduct in 2023 if the company uses the cash method of accounting?

On July 1, 2023, Tea, Inc. paid $19,500 for a service contract that covers their office computers, printers, and copiers from July 1, 2023 through December 31, 2024. How much of the payment can Tea, Inc. deduct in 2023 if the company uses the cash method of 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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Question

On July 1, 2023, Tea, Inc. paid $19,500 for a service contract that covers their
office computers, printers, and copiers from July 1, 2023 through December 31,
2024. How much of the payment can Tea, Inc. deduct in 2023 if the company
uses the cash method of accounting?

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