Homework Answers
Solution
There are two main accounting methods used for record keeping
1. cash basis
2. Accrual basis
since in the given case the taxpayer became ineligible to use cash basis method of accounting , hence he has to follow accrual basis which results in change in accounting method.
Calculation of amount of adjustment due to change in accounting method
Particulars Amount(in $)
opening balance of accounts receivable 240000
opening balance of accounts payable 80000
Amount of adjustment to income 160000
There is no adjustment to stock in hand due to change in accounting method.
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LO.2. In 2019, the taxpayer became ineligible to use the cash method of accounting. At the...
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1) 2) 3) Gross Profit During the current year, merchandise is sold for $100,000 cash and...
1)
2)
3)
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Mansfield Office Furniture Store reported the following selected items at December 31, 2019 (previous year - 2018 - amounts are also given as needed): $ 50,000 75,000 63,000 55,000 375,000 Cash Accounts Receivable, net: Dec. 31, 2019 Dec. 31, 2018 Accounts Payable Cost of Goods Sold Merchandise Inventory Dec 31, 2019 Dec 31, 2018 Net Credit Sales Revenue Long-Term Assets Long-Term Liabilities Other Current Assets Other Current Liabilities Short-term Investments 240,000 220,000 820,000 320,000 240,000 135,000 125,000 80,000 Compute Mansfield's...
1)
2)
3)
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