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GreenUp, a calendar year, accrual basis taxpayer, provides landscaping installation and maintenance services to its customers. In August 2020, GreenUp contracted with a university to renovate its lawns and gardens. GreenUp agreed to complete the entire renovation by May 31, 2022, and the university prepaid the entire $100,000 fee. GreenUp completed 20 percent of the work in 2020, 65 percent in 2021, and 15 percent in 2022. Required: How much revenue should GreenUp report on its financial statements for 2020, 2021, and 2022

Respuesta :

Answer:

2020 = $20,000

2021 = $65,000

2022 = $15000

Explanation:

Remember, we are told that GreenUp is a calendar year taxpayer, meaning its revenue would be recorded annually (each year) even though the university prepaid the entire $100,000 fee.

For 2020: 20 percent of $100,000 = [tex]\frac{20}{100} * 100000[/tex] = $20,000

For 2021: 65 percent of $100,000 = [tex]\frac{65}{100} * 100000[/tex] = $65,000

For 2022:  15 percent of $100,000 = [tex]\frac{15}{100} * 100000[/tex] = $15000

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