CT Computer Corporation,an accrual basis taxpayer,sells service contracts on the computers it sells.At the beginning of January of this year,CT Corporation sold contracts with service to begin immediately: The amount of income CT Corporation must report for this year is

Question

CT Computer Corporation,an accrual basis taxpayer,sells service contracts on the computers it sells.At the beginning of January of this year,CT Corporation sold contracts with service to begin immediately:  The amount of income CT Corporation must report for this year is

Quizplus · Accepted Answer

Since the service contracts were sold at the beginning of January and the service began immediately, the entire amount of the contract is recognized as revenue in the current year. Therefore, the amount of income CT Corporation must report for this year is $1,680.

CT Computer Corporation,an Accrual Basis Taxpayer,sells Service Contracts on the Computers