Ben owns and operates a sole proprietorship called BPS. BPS provides private golf lessons at a country club in Aurora, Illinois.

During 2023, BPS billed clients $86,700 based on hourly lesson rates to which the clients had agreed. Of this amount BPS collected $61,000 in cash for lessons completed in 2023. BPS expects to collect about $23,000 of the outstanding billings in 2024, but the remaining $2,700 will likely be written off as uncollectible. In addition, BPS collected $14,500 in cash during 2023 for lessons that will occur in 2024.

Besides providing private golf lessons, BPS also contracted with the country club to staff the driving range. During 2023, BPS billed the country club $27,200 for the service. The club paid $17,000 of the amount but disputed the remainder, claiming that BPS had breached its contract with the club by overstaffing the driving range. BPS had not collected the remaining $10,200 by the end of 2023 because litigation was ongoing. BPS believes there is significant uncertainty regarding the outcome of the dispute and whether a court will agree that it is entitled to the remaining $10,200.

BPS was billed for the following expenses during 2023: Monthly advertising (in the clubhouse) $ 13,150 Pro golf teachers membership fees 860 Supplies (golf tees, balls, etc.) 4,720 Facility rental fee 6,800 Malpractice insurance premium 2,400 Monthly accounting fees 8,820

The expenses were all paid in 2023. BPSs malpractice insurance premium was paid on May 1, 2023, and it covers the period beginning on July 1, 2023 and ending on June 30, 2024. The facility rental fee ($100 per week) was paid on July 1, 2023 and it covers rental charges for 52 weeks in 2023 and the first 16 weeks of 2024. BPS only pays for supplies that are used at the country club. Although BPS could have bought the supplies for half the cost elsewhere, BPS buys them at an additional price from the golf pro shop because it is operated by Bens brother.

Ben wants to minimize BPSs 2023 taxable income. Therefore, he has engaged you to determine the minimum amount of revenues and the maximum amount of expenses BPS can recognize under the cash and accrual methods of accounting.

If BPS uses the cash method of accounting, what is the minimum amount of revenue it must recognize in 2023 from the golf lessons it provides to clients and from staffing the driving range?