Bigham Corporation, an accrual basis calendar year taxpayer, sells its services under 12-month and 24-month contracts....
Bigham Corporation, an accrual basis calendar year taxpayer, sells its services under 12-month and 24-month contracts. The corporation provides services to each customer every month. On July 1, 2019, Bigham sold the following customer contracts:
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Determine the income to be recognized in taxable income in 2019 and 2020.
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Homework Answers
| Length of Contract | 2019 Income | 2020 Income |
| 12 months | $ 9,200 | $ 9,200 |
| 24 months | $ 9,200 | $ 18,400 |
| Workings: | ||
| Length of Contract | 2019 Income | 2020 Income |
| 12 months | $18400 X 6/12 | $18400 X 6/12 |
| 24 months | $36800 X 6/24 | $36800 X 12/24 |
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Bigham Corporation, an accrual basis calendar year taxpayer,
sells its services under 12-month and 24-month contracts....
Exercise 4-22 (Algorithmic) (LO. 2) Bigham Corporation, an accrual basis calendar year taxpayer, sells its services...
Exercise 4-22 (Algorithmic) (LO. 2) Bigham Corporation, an accrual basis calendar year taxpayer, sells its services under 12-month and 24-month contracts. The corporation provides services to each customer every month. On July 1, 2019, Bigham sold the following customer contracts: Length of contract 12 months Total Proceeds $40,000 $80,000 24 months Determine the income to be recognized in taxable income in 2019 and 2020. Length of Contract 2019 Income 2020 Income 12 months $ $ $ 24 months
eBook Calculatos Exercise 4-22 (Algorithmic) (LO. 2) Bigham Corporation, an accrual basis calendar year taxpayer, sells...
eBook Calculatos Exercise 4-22 (Algorithmic) (LO. 2) Bigham Corporation, an accrual basis calendar year taxpayer, sells its services under 12-month and 24-month contracts. The corporation provides services to each customer every month. On July 1, 2019, Bigham sold the following customer contracts: Length of contract 12 months Total Proceeds $48,400 $96,800 24 months Determine the income to be recognized in taxable income in 2019 and 2020. Length of Contract 2019 Income 2020 Income 12 months 24 months
Drake Appliance Company, an accrual basis taxpayer, sells home appliances and service contracts. Determine the effect...
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Drake Appliance Company, an accrual basis taxpayer, sells home appliances and service contracts. Determine the effect...
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Drake Appliance Company, an accrual basis taxpayer, sells home appliances and service contracts. Determine the effect of each of the following transactions on the company's 2019 gross income assuming that the company uses any available options to defer its taxes. a. In December 2018, the company received a $1,200 advance payment from a customer for an appliance that Drake special ordered from the manufacturer. The appliance did not arrive from the manufacturer until January 2019, and Drake immediately delivered it...
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