Put T for Taxable Income or N for Nontaxable Income

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes.
-Bigtown Advertising Agency, a calendar-year, accrual basis taxpayer, was paid $60,000 for a three-year advertising contract on July 1, 2017, and $36,000 for a 12-month contract on December 1, 2017 How much income must Bigtown recognize for these contracts in years 2017 and 2018, respectively?

A) $96,000, 0
B) $13,000, $83,000
C) $63,000, $33,000
D) $13,000, $53,000

Correct Answer:

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