Squawk Box Company (Squawk Box), a C corporation, started business in 2008. Squawk Box used the cash method for financial and tax reporting purposes for years 2008 through 2015. During years 2008 through 2012, annual gross receipts did not exceed $1,000,000; however in 2013 annual gross receipts were $5,250,000; in 2014 they were $6,500,000 and in 2015 they were $7,750,000. (See Table 1 below) If determined using the accrual method, Squawk Boxs books at the start of tax year 2015 would show the following: Accounts Receivable, $250,000; Accounts Payable, $115,000; and Inventory, $650,000. In 2016 Squawk Box has taxable income of $7,775,000 determined using the accrual basis of accounting.

Table 1
Year	Gross Receipts
2008	500,000
2009	550,000
2010	625,000
2011	700,000
2012	1,000,000
2013	5,250,000
2014	6,500,000
2015	7,750,000
2016	7,775,000

Determine whether Squawk Box qualifies to make this change under the automatic consent procedures of Revenue Procedure 2015-13 or should use Revenue Procedure 2011-14.

Determine whether the change in Squawk Boxs accounting method will require an adjustment of income under IRC 481 and determine the timing of the recognition of this adjustment.

Prepare an excel worksheet calculating any IRC 481 adjustment and determining the total taxable income that Taxpayer will recognize.