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11 TUUL UI Wese. 12. Maroon Corporation expects its employees income tax rates to increase next year. The employees use the
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Answer #1

Solution: The answer is

c. The empolyee will not be required to recognize the income until it is received, in 2020

Reason: As per the accounting and tax principles , and income or expense should be recognize in the period of sales or services provided or received. But in this question, it is given that empolyees follow the cash method. Empolyee will recognize it when he/she received, rather than having a right to claim the income. So, income should be recognize in 2020 January rather than 2019 December.

Option (a)(b)(d)(e) are not correct because of option (c) is correct.

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