In October 2016,Jonathon Remodeling Co

question 73

Multiple Choice

In October 2016,Jonathon Remodeling Co. ,an accrual-method taxpayer,remodels and renovates an office building for Dale and bills him $30,000.Dale signs a note for the debt.Dale keeps delaying payment and files bankruptcy in 2017.Creditors are informed that no assets are available for payment.Jonathon Remodeling Co.will report

• A)$0 income in both years.
• B)$30,000 income in 2016 and a bad debt deduction of $30,000 in 2017.
• C)$30,000 income in 2016 and a STCL of $30,000 in 2017 limited to $3,000 after netting.
• D)$30,000 income in 2016 and then must amend last year's return to show $0 income when advised of the bankruptcy.

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Definitions:

Surplus

An excess of production or supply over demand.

Quantity Supplied

The amount of a good or service that producers are willing to sell at a given price over a specific period.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level, at a given time.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price during a specified time period.