Windjammer Corporation, a Cash-Basis, Calendar-Year Corporation Sold $30,000 of Merchandise

Multiple Choice

Windjammer Corporation, a cash-basis, calendar-year corporation sold $30,000 of merchandise to Jackpot Company in January, year 1.In November, Jackpot declared bankruptcy without paying Windjammer.In year 4, Jackpot had reorganized under a new owner and paid all its old debts including the $30,000 owed Windjammer.How does Windjammer treat these events?

A) Recognize $30,000 revenue in year 1 only.
B) Recognize $30,000 revenue in year 4 only.
C) Deduct $30,000 as a bad debt in year 1.
D) Deduct $30,000 as a bad debt in year 1; recognize $30,000 income in year 4.