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Homework answers / question archive / D Question 7 Tin At 43 10 pts Recordings 65 (10 points) Techforce Corporation, a small accrual basis taxpayer that uses the calendar year as its tax year sells computer programming and coding courses under contracts ranging from 3 months to 2 years
D Question 7 Tin At 43 10 pts Recordings 65 (10 points) Techforce Corporation, a small accrual basis taxpayer that uses the calendar year as its tax year sells computer programming and coding courses under contracts ranging from 3 months to 2 years. In August 2020, Techforce sells three month contracts for $30.000, one-year contracts for $90,000, and two-year contracts for $220,000. Each of the contracts sold provides that services will start on August 1, 2020. If Techforce wants to defer its service income as much as possible, how much must it include in income in 2020, 2021, and/or any later years? Drive Upload Choose a File « Previous
Statement Showing Income
| Incomes | 2020 | 2021 | 2022 |
| Three Months Contracts | 30000 | - | - |
| One Year Contract | 37500 | 52500 | - |
| Two Year Contract | 45833 | 110000 | 64167 |
| Total Income | 113333 | 162500 | 64167 |
Working Notes
The calender month is from January to December.
Three Month Contract
2020 = 30000
One Year Contract
2020 = From Augest to December = (90000 X 5/12 ) = 37500
2021 = From January to July = ( 90000 X 7/12 ) = 52500
Two Year Contract
2020 = From Augest to December = ( 220000 X 5/24) = 45833
2021 = From January to December = ( 220000 X 12/24 ) = 110000
2022 = From January to July = ( 220000 X 7/24 ) = 64167
