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Galaxy cable tv company, an accrual basis taxpayer, allows its customers to pay by the year...

Galaxy cable tv company, an accrual basis taxpayer, allows its customers to pay by the year iin advance ($350 per year), or two years in advance ($680). In june 2019, the company collected the following amounts applicable to future services:

July 2019-June 2021 services (2 year contracts): $200,000

July2019-2020 services ( one year contracts) 80,000

Total= $28,000

As a result of the above, how much should Galxay cable report as gross income:

A: in 2019?

B: in 2020?

C: in 2021?

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Answer #1

Solution Galaxy cable shall report proportinate revenue in each year based on the period covered. Year 2019 6 month 6 month Y

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