Colbert operates a catering service on the accrual method. in july of year 1 colbert received a payment of $9,000 for 18 months of catering services to be rendered from august 1st of year 1 through july 31st year 3. when must colbert recognize the income if his accounting methods are selected to minimize income recognition?

a. $500 is recognized in year 1, $6,000 in year 2, and $2,500 in year 3.
b. $500 is recognized in year 1 and $8,500 in year 2.
c. $9,000 is recognized in year 3.
d. $2,500 is recognized in year 1 and $6,500 in year 2.
e. $9,000 is recognized in year 1.

D. $2,500 is recognized in year 1 and $6,500 in year 2.

You need another option

$2500 year 1

$6000 year 2

$500   year 3

Explanation:

Under the accrual basis of accounting (or accrual method of accounting), revenues are reported on the income statement when they are earned. When the revenues are earned but cash is not received, the asset accounts receivable will be recorded.

Accrual method  

Aug to 18 Months9000  

Aug Year 1500  

Sep Year 1500  

Oct Year 1500  

Nov Year 1500  

Dec Year 1500    2500

Jan Year 2500  

Feb Year 2500  

Mar Year 2500  

Apr Year 2500  

May Year 2500  

Jun Year 2500  

Jul Year 2500  

Aug Year 2500  

Sep Year 2500  

Oct Year 2500  

Nov Year 2500  

Dec Year 2500  6000

Jan Year 3500           500

hi : ) i found this so i hope this !

"we first find value of tax in dollars.

the difference between the two prices   is: 23. 54 - 22 = 1.54

therefore the sales tax in dollars is 1.54

the tax % will be   (amount of tax / original cost price ) × 100

(1.54 / 22) × 100  → (0.07) × 100 =   7

so the tax rate is 7%

we can double check the answer.

7 % of 22   → (7/100) × 22 → 0.07 × 22 = 1.54

22 + 1.54 = 23.54"

anjan should should report alteast 5000 on the first apyment and 10,000 each year

explanation: