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 CT Corporation is an accrual basis taxpayer, they must report the income from the service contracts immediately. The total amount of income from the service contracts sold at the beginning of January is $1,680 ($140 x 12 contracts). Therefore, the correct answer is C).

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