Mike Operates a Fishing Outfitter as an Accrual-Method Sole Proprietorship

question 74

Essay

Mike operates a fishing outfitter as an accrual-method sole proprietorship. On March 1 ^st of this year, Mike received $15,000 for three outfitting trips. This is the first time Mike agreed to such a payment and he is obligated to outfit one trip per year for the next three summers, beginning this year. How much income must Mike recognize in each of the next three years if he is attempting to minimize his tax burden?

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Definitions:

Flavor Enhancement

The process of improving or intensifying the taste or aroma of food and drink products through the addition of ingredients or alteration of preparation methods.

Odorants

Chemical substances that are perceived by the sense of smell.

Olfactory Receptors

Specialized nerve cells responsible for detecting odors in the environment and initiating the sense of smell.

Molecules

The smallest units of a chemical compound that can exist while retaining the identity of that compound.