In October of year 0, Janine received a $20,625 payment from a client for 33 months...
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In October of year 0, Janine received a $20,625 payment from a client for 33 months of security services she will provide starting on November 1 of year 0. This amounts to $625 per month. Janine is a calendar-year taxpayer. a. When must Janine recognize the income from the $20,625 advance payment for services if she uses the cash method of accounting? Year 1 and year 2 Year 1 Year O Year O and year 1 Year 2 b. When must Janine recognize the income from the $20,625 advance payment for services if she uses the accrual method of accounting? Year O Year 2 Year 1 Year O and Year 1 O Year 1 and Year 2 c. Suppose that instead of services, Janine received the payment for a security system (inventory) that she will deliver and install in year 2. When would Janine recognize the income from the advance payment for the inventory sale if she uses the accrual method of accounting and she elects to use the deferral method for reporting income from advance payments? For financial accounting purposes, she reports the income when the inventory is delivered. Year 1 and year 2 Year 1 Year O and year 1 Year 2 O Year O d. Suppose that instead of services, Janine received the payment for inventory to be delivered next year. When would Janine recognize the income from the advance payment for sale of goods if she uses the accrual method of accounting and she does not elect to use the deferral method for advance payments? Year 2 Year O Year 1 Year O and year 1 Year 1 and year 2 In October of year 0, Janine received a $20,625 payment from a client for 33 months of security services she will provide starting on November 1 of year 0. This amounts to $625 per month. Janine is a calendar-year taxpayer. a. When must Janine recognize the income from the $20,625 advance payment for services if she uses the cash method of accounting? Year 1 and year 2 Year 1 Year O Year O and year 1 Year 2 b. When must Janine recognize the income from the $20,625 advance payment for services if she uses the accrual method of accounting? Year O Year 2 Year 1 Year O and Year 1 O Year 1 and Year 2 c. Suppose that instead of services, Janine received the payment for a security system (inventory) that she will deliver and install in year 2. When would Janine recognize the income from the advance payment for the inventory sale if she uses the accrual method of accounting and she elects to use the deferral method for reporting income from advance payments? For financial accounting purposes, she reports the income when the inventory is delivered. Year 1 and year 2 Year 1 Year O and year 1 Year 2 O Year O d. Suppose that instead of services, Janine received the payment for inventory to be delivered next year. When would Janine recognize the income from the advance payment for sale of goods if she uses the accrual method of accounting and she does not elect to use the deferral method for advance payments? Year 2 Year O Year 1 Year O and year 1 Year 1 and year 2
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Answer Part a correct option is year 0 Under the cash m... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
Posted Date:
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