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Problem 4-31 (Algorithmic) (LO. 2, 5) Al is a medical doctor who conducts his practice as a sole proprietor. During 2020, he

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Answer #1
a
Cash received for Medical services 607800
Add: Advance payment received 16000
Gross income using the cash basis of accounting 623800
b
Cash received for Medical services 607800
Less: Payment against services provided in 2019 -33600
Add: Accounts Receivable at the end of 2020 91400
Gross income using the accrual basis of accounting 665600
c
Al should use the cash method of accounting so that he will not have to pay income taxes on the uncollected accounts receivable
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