Shadow Services Uses the Accrual Method and Reports on a Calendar

question 28

Essay

Shadow Services uses the accrual method and reports on a calendar year. This year Shadow agreed to a uniform cleaning contract with Odie Cleaning. Under the contract Odie bills Shadow for cleaning services as the services are provided. At year end Shadow paid Odie $2,350 for the services rendered during the year. In addition, Shadow paid Odie $700 for cleaning services expected in January of next year. What amount, if any, can Shadow deduct for the cleaning services this year?

---

Definitions:

White House

The formal dwelling and office of the United States President, positioned at 1600 Pennsylvania Avenue NW, Washington, D.C.

1824

The year marked by the United States presidential election, which was ultimately decided in the House of Representatives, leading to John Quincy Adams’ presidency.

American System

An economic plan that played a prominent role in American policy during the first half of the 19th century, rooted in the belief in protectionism, a national bank, and internal improvements (such as roads and canals) to foster commerce and strengthen the nation.

Whigs

A political party active in the 19th century United States that advocated for federal government support of internal improvements and a national bank.