YMB is a calendar year corporatio. On December 12, YMB billed a client $17,800 for services rendered during October and November. It had not received payment by December 31. On December 10, YMB received a $4,000 check from a tenant that leases office space from the corporation. The payment was for next year's January and Feburary rent.
a. If YMB is a cash basis taxpayer, how much income should it recognize from the given transactions this year?
b. If YMB is an accrual basis taxpayer, how much income should it recognize from the transactions this year?
