Answer:
Orange Cable TV Company
As a result of this, Orange Cable should report as gross income for 2021, the year following receipt:
$186,000
Explanation:
a) Data and Calculations:
Annual subscriptions = $600 per year
Two-years subscriptions = $960
September 2020 collections:
October 2020-September 2022 services (200 two-year contracts) = $192,000
Monthly subscriptions = $192,000/24 = $8,000
October 2020-September 2021 services (200 one-year contracts) = 120,000
Monthly subscriptions = $120,000/12 = $10,000
Total = $312,000
Collections for 2021:
a. Monthly subscriptions of $8,000 * 12 = $96,000
b. Monthly subscriptions of $10,000 * 9 = 90,000
Total collections for 2021 = $186,000
