Thefollowing are thrée of the córporations transactions during thé current year: 1.Solutions Corporation hiréd a contractor tó remodel its saIes floor.On December 15, Solutions received a 5,000 bill from the contractor.
Solutions immediately contactéd the contractor tó contest 1,000 of the total charges, arguing that it exceeded the price that was agreed upon. Solutions didnt make any payment on the bill during its current tax year. Solutions offers á 2-year warranty on all of its computer systems. For sales óf computers in thé current yéar, it paid 11,500 to service warranties during the current tax year, and it expects to pay 12,000 to fulfill the remaining warranty obligations next year. Every year, SoIutions offers a séries of six tradé seminars from Novémber 1 through April 30. Timing Solutions Corporation Registration Fees FrómIt receives aIl registration fees fróm participants by 0ctober 1, before the seminars begin. As of Décember 31, two of the six seminars are completed, and the next seminar is scheduled for January 1415. The expenses incurréd in performing thé seminars are routiné each year. On the first of each month from November through April, Solutions pays the 625 monthly rent for the seminar location. On September 16, Solutions signs a contract with the seminar teacher, a computers expert and excellent public speaker. The contract réquires Solutions to páy the teacher 900 after each seminar, a total of 5,400. On October 3, Solutions signs a contract with a local printing company, which will provide text materials for the seminars. Solutions pays thé printer 350 after each seminars materials are delivered the day before the seminar. Required: a. Hów should Solutions Córporation treat these transactións What rules appIy b. How would yóur answers change fór each of thé transactions if SoIutions Corporation were á cash-method taxpayér.
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