Question
1. In year 2020, Mr. Happy received gross receipts from his clients in the amount of 100,000. He incurred expenses of $30,000, which he paid
1. In year 2020, Mr. Happy received gross receipts from his clients in the amount of 100,000. He incurred expenses of $30,000, which he paid in 2020. If Mr. Happy is a cash method taxpayer, what is his income for 2020?
2. However, Mr. Happy only receives $90,000 in 2020 and the balance $10,000 in 2021. The work has all been done in 2020. If Mr. Happy is an accrual method taxpayer, what is his income for 2020?
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Survey of Accounting
Authors: Thomas P. Edmonds, Frances M. McNair, Philip R. Olds, Bor Yi
3rd Edition
978-1259683794, 77490835, 1259683796, 9780077490836, 978-0078110856
