Murphy Uses the Accrual Method and Reports on a Calendar

question 106

Essay

Murphy uses the accrual method and reports on a calendar year. This year, Murphy signed a binding contract to provide consulting services to Kirby beginning next year. Murphy incurred $15,000 to train his staff for this particular project. In addition, Murphy estimates that he will incur another $60,000 to complete the Kirby contract. What amount, if any, can Murphy deduct this year for the services expected to be rendered next year?

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Definitions:

Distracting

Something that diverts attention away from the main focus or task, often leading to a decrease in productivity or concentration.

Emotional Responses

Reactions that involve feelings such as happiness, anger, or sadness, typically triggered by an external event.

Main Ideas

The central concepts or essential points that are being communicated in a text or speech.

Tape-Record

A method of recording sound or video onto magnetic tape for playback or storage.