Identify the tax issue or issues suggested by the following situations and state each issue in the
Question:
Company A, a calendar year taxpayer, has always used the cash method of accounting. It completed an engagement for a major client in November 2015 and submitted a bill for its $160,000 fee. Because Company A didn’t receive payment before year-end, it recognized no income from the engagement on its 2015 tax return. In January 2016, Company A received permission from the IRS to change from the cash method to the accrual method. This change is effective for 2016. On February 2, 2016, Company A received a $160,000 check from the client in payment of the bill.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Principles Of Taxation For Business And Investment Planning 2016 Edition
ISBN: 9781259549250
19th Edition
Authors: Sally Jones, Shelley Rhoades Catanach
Question Posted: