Office Palace, Inc

question 51

Multiple Choice

Office Palace, Inc., leased an all-in-one printer to a new customer, Ashley, on December 27, 2017. The printer was to rent for $600 per month for a period of 36 months beginning January 1, 2018. Ashley was required to pay the first and last month's rent at the time the lease was signed. Ashley was also required to pay a $1,500 damage deposit. Office Palace must recognize as income for the lease:

• A)$0 in 2017, if Office Palace is an accrual basis taxpayer.
• B)$7,800 in 2018, if Office Palace is a cash basis taxpayer.
• C)$2,700 in 2017, if Office Palace is a cash basis taxpayer.
• D)$1,200 in 2017, if Office Palace is an accrual basis taxpayer.
• E)None of these.

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Definitions:

Normal Good

A good for which demand increases as consumer income rises, demonstrating a direct relationship between income and demand.

Allocative Efficiency

Achieved when resources are distributed in a way that maximizes the benefits received by society, aligning production with consumer preferences.

Output Mix

The combination or assortment of different products that a firm produces, reflecting the firm's strategy to meet various consumer demands or market segments.

Economic Growth

A growth in an economy's ability to generate goods and services over different time intervals.