Homework Answers
| 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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Problem 4-31 (Algorithmic) (LO. 2, 5) Al is a medical doctor who conducts his practice as...
Problem 4-31 (Algorithmic) (LO. 2,5) Al is a medical doctor who conducts his practice as a...
Problem 4-31 (Algorithmic) (LO. 2,5) Al is a medical doctor who conducts his practice as a sole proprietor. During 2020, he received cash of $474,800 for medical services. Of the amount collected, $54,000 was for services provided in 2019. At the end of 2020, Al had accounts receivable of $89,700, all for services rendered in 2020. In addition, at the end of the year, Al received $16,500 as an advance payment from a health maintenance organization (HMO) for services to...
Problem 4-15 (Algorithmic) (LO. 2) Al is a physician who conducts his practice as a sole...
Problem 4-15 (Algorithmic) (LO. 2) Al is a physician who conducts his practice as a sole proprietor. During 2019, he received cash of $558,400 for medical services. Of the amount collected, $40,800 was for services provided in 2018. At the end of 2019, Al held accounts receivable of $89,700, all for services rendered in 2019. In addition, at the end of the year, Al received $17,000 as an advance payment from a health maintenance organization (HMO) for services to be...
Al is a medical doctor who conducts his practice as a sole proprietor. During 2019, he...
Al is a medical doctor who conducts his practice as a sole proprietor. During 2019, he received cash of $592,600 for medical services. Of the amount collected, $52,800 was for services provided in 2018. At the end of 2019, Al had accounts receivable of $93,100, all for services rendered in 2019. In addition, at the end of the year, Al received $16,000 as an advance payment from a health maintenance organization (HMO) for services to be rendered in 2020. a....
Al is a medical doctor who conducts his practice as a sole proprietor. During 2020, he...
Al is a medical doctor who conducts his practice as a sole proprietor. During 2020, he received cash of $661,000 for medical services. Of the amount collected, $40,800 was for services provided in 2019. At the end of 2020, Al had accounts receivable of $96,500, all for services rendered in 2020. In addition, at the end of the year, Al received $16,500 as an advance payment from a health maintenance organization (HMO) for services to be rendered in 2021. a....
oblem Set Question 17 0.5 pts owns an accounting practice (sole proprietorship). During 2020, Al received...
oblem Set Question 17 0.5 pts owns an accounting practice (sole proprietorship). During 2020, Al received payments of $200,000. The $200,000 consists of: • $30,000 payment for services rendered in 2019 but not paid by the client until 2020 • $160,000 payment for services rendered and paid in 2020 • $10,000 prepayment received in 2020 for services that will be rendered in 2021 In addition to the $200,000 payments received in 2020, at the end of 2020 Al held accounts...
Ann owns an accounting practice (sole proprietorship). During 2020, Ann received payments of $200,000. The $200,000...
Ann owns an accounting practice (sole proprietorship). During 2020, Ann received payments of $200,000. The $200,000 consists of: $30,000 payment for services rendered in 2019 but not paid by the client until 2020 $160,000 payment for services rendered and paid in 2020 $10,000 prepayment received in 2020 for services that will be rendered in 2021 In addition to the $200,000 payments received in 2020, at the end of 2020 Ann held accounts receivable of $10,000, all for services rendered in...
Ann owns an accounting practice (sole proprietorship). During 2020, Ann received payments of $200,000. The $200,000...
Ann owns an accounting practice (sole proprietorship). During 2020, Ann received payments of $200,000. The $200,000 consists of $30,000 payment for services rendered in 2019 but not paid by the client until 2020 $160,000 payment for services rendered and paid in 2020 $10,000 prepayment received in 2020 for services that will be rendered in 2021 In addition to the $200,000 payments received in 2020, at the end of 2020 Ann held accounts receivable of $10,000, all for services rendered in...
Question 16 0.4 pts Ann owns an accounting practice (sole proprietorship). During 2020, Ann received payments...
Question 16 0.4 pts Ann owns an accounting practice (sole proprietorship). During 2020, Ann received payments of $200,000. The $200,000 consists of: • $30,000 payment for services rendered in 2019 but not paid by the client until 2020 • $160,000 payment for services rendered and paid in 2020 • $10,000 prepayment received in 2020 for services that will be rendered in 2021 In addition to the $200,000 payments received in 2020, at the end of 2020 Ann held accounts receivable...
Problem 3 : Samantha is a CPA. She operates a tax return preparation service business as...
Problem 3 : Samantha is a CPA. She operates a tax return preparation service business as a sole proprietorship. During 2020, she received cash of $95,000 for tax return preparation services. Of the amount received in 2020, $3,500 relates to payment of late invoices for tax services provided during 2019. Samantha also has accounts receivable of $9,000 for services provided in 2020. Compute Samantha’s gross income for the year 2020 under (a) the cash method of accounting and (b) the...
Problem 5-55 (LO. 3) How does the tax benefit rule apply in the following cases? a....
Problem 5-55 (LO. 3) How does the tax benefit rule apply in the following cases? a. In 2018, the Orange Furniture Store, an accrual method sole proprietorship, sold furniture on credit for $1,000 to Sammy. The cost of the furniture was $600. In 2019, Orange took a bad debt deduction for the $1,000. In 2020, Sammy inherited some money and paid Orange the $1,000 he owed. Orange's owner was in the 35% marginal tax bracket in 2018, the 12% marginal...
Problem 4-31 (Algorithmic) (LO. 2,5) Al is a medical doctor who conducts his practice as a sole proprietor. During 2020, he received cash of $474,800 for medical services. Of the amount collected, $54,000 was for services provided in 2019. At the end of 2020, Al had accounts receivable of $89,700, all for services rendered in 2020. In addition, at the end of the year, Al received $16,500 as an advance payment from a health maintenance organization (HMO) for services to...
Problem 4-15 (Algorithmic) (LO. 2) Al is a physician who conducts his practice as a sole proprietor. During 2019, he received cash of $558,400 for medical services. Of the amount collected, $40,800 was for services provided in 2018. At the end of 2019, Al held accounts receivable of $89,700, all for services rendered in 2019. In addition, at the end of the year, Al received $17,000 as an advance payment from a health maintenance organization (HMO) for services to be...
Al is a medical doctor who conducts his practice as a sole proprietor. During 2020, he received cash of $661,000 for medical services. Of the amount collected, $40,800 was for services provided in 2019. At the end of 2020, Al had accounts receivable of $96,500, all for services rendered in 2020. In addition, at the end of the year, Al received $16,500 as an advance payment from a health maintenance organization (HMO) for services to be rendered in 2021. a....
oblem Set Question 17 0.5 pts owns an accounting practice (sole proprietorship). During 2020, Al received payments of $200,000. The $200,000 consists of: • $30,000 payment for services rendered in 2019 but not paid by the client until 2020 • $160,000 payment for services rendered and paid in 2020 • $10,000 prepayment received in 2020 for services that will be rendered in 2021 In addition to the $200,000 payments received in 2020, at the end of 2020 Al held accounts...
Question 16 0.4 pts Ann owns an accounting practice (sole proprietorship). During 2020, Ann received payments of $200,000. The $200,000 consists of: • $30,000 payment for services rendered in 2019 but not paid by the client until 2020 • $160,000 payment for services rendered and paid in 2020 • $10,000 prepayment received in 2020 for services that will be rendered in 2021 In addition to the $200,000 payments received in 2020, at the end of 2020 Ann held accounts receivable...
Problem 5-55 (LO. 3) How does the tax benefit rule apply in the following cases? a. In 2018, the Orange Furniture Store, an accrual method sole proprietorship, sold furniture on credit for $1,000 to Sammy. The cost of the furniture was $600. In 2019, Orange took a bad debt deduction for the $1,000. In 2020, Sammy inherited some money and paid Orange the $1,000 he owed. Orange's owner was in the 35% marginal tax bracket in 2018, the 12% marginal...
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