Heat-A-Home, an Accrual Basis Calendar Year Taxpayer, Sells Furnaces

question 14

True/False

Heat-a-Home, an accrual basis calendar year taxpayer, sells furnaces.With each sale, the corporation also sells a one-, two-, or three-year contract to turn the furnaces on and off and do routine maintenance.Assuming the corporation sold a two-year contract on November 1 at a price of $240, it may report income for this year of $20.