Taylor Corporation, an accrual-basis calendar-year corporation, rented an office building to Austin for $3,000 per month.On December 28, 2018, Taylor received a deposit of $4,000 in addition to the first and last months' rent.Occupancy began on January 1, 2019.On August 15, 2019 Austin closed the business.In 2019, Taylor had collected rent for February, March, April and May, but collected no payments thereafter.Taylor withheld $1,100 from the deposit because of damage to the property and $1,500 for unpaid rent.Taylor refunded the balance of the deposit to Austin.What amount should Taylor report as gross income for 2019?

Question

Quizplus · Accepted Answer

Taylor should report $14,600 as gross income for 2019, which includes the rent collected for January through May ($3,000 x 5 = $15,000) minus the $1,500 withheld for unpaid rent, plus the $1,100 withheld for damages.

Taylor Corporation, an Accrual-Basis Calendar-Year Corporation, Rented an Office Building