Al is a medical doctor who conducts his practice as a sole proprietor. During 2022, he received cash of $357,000 for medical services. Of the amount collected, $40,800 was for services provided in 2021. At the end of 2022, Al had accounts receivable of $99,900, all for services rendered in 2022. In addition, at the end of the year, Al received $9,500 as an advance payment from a health maintenance organization (HMO) for services to be rendered in 2023. Question Content Area a. Compute Al's gross income for 2022 using the cash basis of accounting. b. Compute Al's gross income for 2022 using the accrual basis of accounting.
Al is a medical doctor who conducts his practice as a sole proprietor. During 2022, he received cash of $357,000 for medical services. Of the amount collected, $40,800 was for services provided in 2021. At the end of 2022, Al had accounts receivable of $99,900, all for services rendered in 2022. In addition, at the end of the year, Al received $9,500 as an advance payment from a health maintenance organization (HMO) for services to be rendered in 2023. Question Content Area a. Compute Al's gross income for 2022 using the cash basis of accounting. b. Compute Al's gross income for 2022 using the accrual basis of accounting.
Chapter4: Gross Income: Concepts And Inclusions
Section: Chapter Questions
Problem 32P
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