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The Cable TV Co., an accrual basis taxpayer, allows its customers to pay by the month ($10 each month), by the year ($110 per year), or two years in advance ($200). In December this year, the company collected the following amounts applicable to future services:   January next year services (monthly contracts)                                      $11,000 January - December next year Services (annual contracts)              $44,000 January - December Services for the next two years                           $16,000   The income from the above that must be reported as gross income for this year is:   $55,000.   $71,000.   $16,000.   $27,000.   None of the above

The Cable TV Co., an accrual basis taxpayer, allows its customers to pay by the month ($10 each month), by the year ($110 per year), or two years in advance ($200). In December this year, the company collected the following amounts applicable to future services:   January next year services (monthly contracts)                                      $11,000 January - December next year Services (annual contracts)              $44,000 January - December Services for the next two years                           $16,000   The income from the above that must be reported as gross income for this year is:   $55,000.   $71,000.   $16,000.   $27,000.   None of the above

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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The Cable TV Co., an accrual basis taxpayer, allows its customers to pay by the month ($10 each month), by the year ($110 per year), or two years in advance ($200). In December this year, the company collected the following amounts applicable to future services:

 

January next year services (monthly contracts)                                      $11,000

January - December next year Services (annual contracts)              $44,000

January - December Services for the next two years                           $16,000

 

The income from the above that must be reported as gross income for this year is:

 

$55,000.

 

$71,000.

 

$16,000.

 

$27,000.

 

None of the above

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