Orange Cable TV Company, an Accrual Basis Taxpayer, Allows Its

question 31

Multiple Choice

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 2017, the company collected the following amounts applicable to future services: $\begin{array}{lr}\text { October 2017-September } 2019 \text { services (two-year contracts) } & \$ 144,000 \\\text { October 2017-September } 2018 \text { services (one-year contracts) } & 128,000 \\\text { Total } & \$ 272,000\end{array}$
As a result of the above, Orange Cable should report as gross income:

• A)$272,000 in 2017.
• B)$128,000 in 2017.
• C)$168,000 in 2018.
• D)$222,000 in 2018.
• E)None of these.

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