Business, 01.10.2019 03:10 badpotterchris

Drake appliance company, an accrual basis taxpayer, sells home appliances and service contracts. determine the effect of each of the following transactions on the company’s 2019 gross income assuming that the company uses any available options to defer its taxes. a. in december 2018, the company received a $1,200 advance payment from a customer for an appliance that drake special ordered from the manufacturer. the appliance did not arrange from the manufacturer until january 2019, and drake immediately delivered it to the customer. the sale was reported in 2019 for financial accounting purposes. b. in october 2019, the company sold a 6-month service contract for $240. the company also sold a 36-month service contract for $1,260 in july 2019.

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Drake appliance company, an accrual basis taxpayer, sells home appliances and service contracts. det...

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