Clean Wheels, Inc., a calendar year taxpayer, operates a car wash that is located two blocks from six car dealerships that use the facility regularly.Clean has set up credit arrangements with each of the dealerships to allow them to use the car wash and be billed for the services at the end of the month.During the month of December, Clean billed the dealerships $3,000 for the car wash services.These bills were paid in January.Clean must accrue and report the $3,000 as income in December.

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The Answer of Clean Wheels, Inc., a calendar year taxpayer, operates a car wash that is located two blocks from six car dealerships that use the facility regularly.Clean has set up credit arrangements with each of the dealerships to allow them to use the car wash and be billed for the services at the end of the month.During the month of December, Clean billed the dealerships $3,000 for the car wash services.These bills were paid in January.Clean must accrue and report the $3,000 as income in December.