GreenUp, a calendar year, accrual basis taxpayer, provides landscaping installation and maintenance services to its customers. In August 2023, GreenUp contracted with a university to renovate its lawns and gardens. GreenUp agreed to complete the entire renovation by May 31, 2025, and the university prepaid the entire $100,000 fee. GreenUp completed 20 percent of the work in 2023, 65 percent in 2024, and 15 percent in 2025. Required: a. How much revenue should GreenUp report on its financial statements for 2023, 2024, and 2025? b. How much taxable income must GreenUp recognize in 2023, 2024, and 2025?

GreenUp, a calendar year, accrual basis taxpayer, provides landscaping installation and maintenance services to its customers. In August 2023, GreenUp contracted with a university to renovate its lawns and gardens. GreenUp agreed to complete the entire renovation by May 31, 2025, and the university prepaid the entire $100,000 fee. GreenUp completed 20 percent of the work in 2023, 65 percent in 2024, and 15 percent in 2025. Required: a. How much revenue should GreenUp report on its financial statements for 2023, 2024, and 2025? b. How much taxable income must GreenUp recognize in 2023, 2024, and 2025?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 43P

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