Tax memo Acctg 332-1 solution(1)

Background Your Texas Band Inc is a calendar year...

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Background: Your Texas Band, Inc., is a calendar year corporation. The corporation is a Texas corporation that is based in Dallas, Texas. The band recently sold tickets ($1,000,000) for concerts scheduled in the United States for next year and the following year. For financial statement purposes, Your Texas Band will recognize the income from the ticket sales when it performs the concerts. For tax purposes, the corporation uses the accrual method and would prefer to defer the income from the ticket sales until after the concerts are performed. This is the first time that it has sold tickets one or two years in advance. Their manager, Russell Crowe has asked your advice. Write a memo to Mr. Crowe explaining your findings. Facts: Your Texas Band, Inc., is a calendar year corporation The corporation is a Texas corporation The band is based in Dallas, Texas The band recently sold tickets ($1,000,000) for concerts scheduled in the United States for next year and the following year.
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