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

question 100

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 2011, the company collected the following amounts applicable to future services: As a result of the above, Orange Cable should report as gross income:

• A)$272,000 in 2011.
• B)$128,000 in 2011.
• C)$168,000 in 2012.
• D)$222,000 in 2012.
• E)None of the above.

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Definitions:

1-Bromopentane

An organobromine compound consisting of a five-carbon alkane with a bromine atom attached to the primary carbon.

Di-sec-Butyl Ether

An organic compound formed by the dehydration reaction between two sec-butyl alcohol molecules, resulting in an ether with a dialkyl structure.

Sec-Butanol

A secondary alcohol with the chemical formula C4H10O, where the hydroxyl group is connected to the second carbon in a butane chain.

Sulfuric Acid

A highly corrosive strong mineral acid with the molecular formula H2SO4, widely used in industry for processes including fertilizer manufacturing, oil refining, and wastewater processing.