The Pest Control Company, an accrual-basis taxpayer, allows its customers to pay in advance for...

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Accounting

The Pest Control Company, an accrual-basis taxpayer, allows its customers to pay in advance for their one-year or two-year agreements. In July 2020, the company collected the following amounts applicable to future services:
July 2020- June 2021 services (annual contracts)50,000
July 2020- June 2022 contracts (2-year contracts)100,000
What is the amount of gross income that Pest Control Company must report for 2021?
25,000+75,000=$100,000
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