Tax MCQ Income Tax Chapter 4 Orange Cable TV Company, an accrual basis taxpayer, allows its customers to pay by the year in advance ($500 per year), or two years in advance ($950). In September 2014, the company collected the following amounts applicable to future services:

Orange Cable TV Company, an accrual basis taxpayer, allows its customers to pay by the year in advance ($500 per year), or two years in advance ($950). In September 2014, the company collected the following amounts applicable to future services:

Income Tax Chapter 4

Orange Cable TV Company, an accrual basis taxpayer, allows its customers to pay by the year in advance ($500 per year), or two years in advance ($950). In September 2014, the company collected the following amounts applicable to future services:

October 2014-September 2016 services (two-year contracts) $144,000
October 2014-September 2015 services (one-year contracts) 128,000
Total $272,000
As a result of the above, Orange Cable should report as gross income:

a. $272,000 in 2014.
b. $128,000 in 2014.
c. $168,000 in 2015.
d. $222,000 in 2015.
e. None of these.

Answer: d

Tax MCQ

Orange Cable TV Company, an accrual basis taxpayer, allows its customers to pay by the year in advance ($500 per year), or two years in advance ($950). In September 2014, the company collected the following amounts applicable to future services:

Orange Cable TV Company, an accrual basis taxpayer, allows its customers to pay by the year in advance ($500 per year), or two years in advance ($950). In September 2014, the company collected the following amounts applicable to future services:

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