Trip Garage, Inc. (459 Ellis Avenue, Harrisburg, PA 17111), is an accrual basis taxpayer that repairs automobiles. In late December 2014, the company repaired Samuel Mosley's car and charged him $1,000. Samuel did not think the problem had been fixed, so he refused to pay; thus, Trip refused to release the automobile.

In early January 2015, Trip made a few adjustments under the hood; Trip then convinced Samuel that the automobile was working properly. At that time, Samuel agreed to pay only $900 because he did not have the use of the car for a week. Trip said "fine," accepted the $900, and released the automobile to Samuel.

An IRS agent thinks Trip, as an accrual basis taxpayer, should report $1,000 of income in 2014, when the work was done, and then deduct a $100 business loss in 2015.

Prepare a memo to Susan Apple, the treasurer of Trip, with your recommended treatment for the disputed income.