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Determine the proper tax year for gross income inclusion in each of the following cases A cash...

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Accounting

  1. Determine the proper tax year for gross income inclusion ineach of the following cases

  1. A cash basis landlord makes new tenants pay first and lastmonth’s rent at the start of the lease.  How does thelandlord report these items?

  1. Purple Corporation, an exterminating company, is a calendaryear taxpayer.  It contracts to provide service tohomeowners once a month under a one- two- or three-yearcontact.  For financial reporting purposes, Purplereports the income ratably over the months of the contract. OnApril 1 of the current year, the company sold a customer a one-yearcontract for $120.  How much of the $120 is taxable incurrent and subsequent year if the company is an accrual basistaxpayer? If the $120 is payment on a two-year contract, how muchis taxed in the year of the contract is sold and in the followingyears?  If the $120 is payment on a three-year contract,how much is taxed in the year the contract is sold and in thefollowing years? (10 points)

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