If steven received a payment of $18,000 for 24 months of landscape services ($750 per month commencing on november 1st of this year). if his accounting methods are selected to minimize income recognition is : A. $1,500 is recognized in this year, $16,500 next year.
<h3>Determining the recognized income</h3>
Since we were told that he received payment of the amount of $18,000 and as well received the amount of $750 per months starting from November 1 now let determine his recognized amount.
Recognized amount this year:
Recognized amount this year = Amount received in November × 2 months
Recognized amount this year = $750 × 2 months
Recognized amount this year = $1,500
Recognized amount next year:
Recognized amount next year = Amount received in September - Recognized amount in November
Recognized amount next year = $18,000 - $1,500
Recognized amount year = $16,500
Therefore the correct option is A..
Learn more about recognized amount here: brainly.com/question/26275324
#SPJ1
The complete question is:
Steven operates a landscaping service on the accrual method. In September of this year Steven received a payment of $18,000 for 24 months of landscape services ($750 per month commencing on November 1st of this year). When must Steven recognize the income if his accounting methods are selected to minimize income recognition?
A. $1,500 is recognized in this year, $16,500 next year.
B. $1,500 is recognized this year, $9,000 next year, and $7,500 in the last year or the contract
C. $18,000 is recognized this year
D. $9,000 is recognized this year and $9,000 next year
E. $18,000 is recognized in the last year of the contract
