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38) CT Computer Corporation, beginning of January of this year, CT Corporation sold contracts with service to begin immediately a cash-basis taxpayer, sells service contracts on the computers it sells. At the for three months e for 20 months ne for 48 months The amount of income CT Corporation must report for this year is A) 5200. B) $1,000, C) S1,680. D) $5,000 for 39) One of the requirements that must be met in order to defer recognition of income for advance payments goods is A) the taxpayer's method of accounting for the sale for tax purposes is the same as the method used for financial reporting purposes. B) the goods are on the taxpayer's premises on the last day of the tax year. C) the goods are produced in the United States D) the amount received is more than the taxpayers cost of the goods. 40) Which of the following advance payments cannot qualify for income tax deferral? A) advance collection for services B) advance collection for merchandise C) advance collection of rent without associated services D) advance collection of rent with associated services 41) Norah's Music Lessons Inc. is a calendar-year taxpayer using the accrual method of accounting. On October 1 of this year, the corporation received $1,200 for a one-year contract beginning on that date to provide 10 lessons. The company provided 6 lessons this year under the contract. How much should the corporation include in income this year with respect to this contract? A) $480 B) S360 C) $720 D) $1,200 42) Speak Corporation, a calendar-year, accrual-basis taxpayer, sell packages of foreign langauge lessons to individuals planning to work overseas. In December 2017, it sold and received payment for $600,000 of 24- month lesson packages to be provided evenly through 2018 and 2019. Speak Corporation will recognize the $600,000 of income A) all in 2017 B) half in 2018 and half in 2019. C) all in 2018. D) all in 2019. Page 6 of S

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