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On April 1 of year 0 Stephanie received a $9,000 payment for full payment on a three-year service contract (under the contract Stephanie is obligated to provide advisory services for the next three years).
a. What amount of income should Stephanie recognize in year 0 if she uses the accrual method of accounting (she recognized $2,250 for financial accounting purposes)?
b. What amount of income will Stephanie recognize in year 1 if she uses the accrual method of accounting?
c. What amount of income will Stephanie recognize in year 2, if she uses the accrual method of accounting?
d. What amount of income will Stephanie recognize in year 0 if she recognizes $5,000 of income from the contract for financial statement purposes?
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