Selma operates a contractor's supply store. She maintains her books using the cash method. Selma wants to

Question:

Selma operates a contractor's supply store. She maintains her books using the cash method. Selma wants to know whether the accrual basis of accounting would be preferable for her business.
At the end of the year, Selma's accountant computes her accrual basis income that is used on her tax return. For 2017, Selma reported cash receipts of $1.4 million, which included $200,000 collected on from 2016 sales. It also included the proceeds of a $100,000 bank loan. At the end of 2017, she held $250,000 in from customers, all from 2017 sales.
a. Compute Selma's accrual basis gross receipts for 2017.
b. Selma paid cash for all of the purchases. The total amount paid for merchandise in 2017 was $1.3 million. At the end of 2016, she had merchandise on hand with a cost of $150,000. At the end of 2017, the cost of merchandise on hand was $300,000. Compute Selma's gross income from merchandise sales for 2017?
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...