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Mollys Meadows is an accrual basis taxpayer. In June, Mollys Meadows negotiated a $47,000 contract...

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Accounting

Mollys Meadows is an accrual basis taxpayer. In June, Mollys Meadows negotiated a $47,000 contract for services it would provide to the Carefree Country Club in October of the current year. The contract specifies that Mollys Meadows will receive $5,900 in September as a down payment for those services and will receive the remaining $41,100 in February of the next year, when annual dues for members are paid. In addition, Mollys Meadows will be paid an additional $13,000 if its landscape design wins the annual design competition next year. How much income from this contract should Mollys Meadows recognize in the current year?

a. $60,000

b. $47,000

c. $5,900

d. $0

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