I. Green operates a business that provides accounting services to his clients. He uses the accrual basis to report income and deductions for tax purposes. The following information is available concerning his business for 2020: 1. He billed his clients on open account for services rendered in the amount of $385,000. 2. He collected billings of $11,400 from 2019 and billings of $268,000 from 2020. 3. He received a $3,000, 4-month, 12% note on December 1, 2020 for services rendered during 2020; these services were not included in #1. 4. He received a $2,000, 6-month, noninterest-bearing note on September 1, 2019 for services rendered during 2019. The note was received at a 9% discount. He collected the note on March 1, 2020; this collection was not included in #2. 5. His employees earned wages of $213,000 during 2020. 6. He made payments to his employees of $16,500 for wages earned during 2019 and of $199,000 for wages earned during 2020. 7. He purchased an 18-month fire insurance policy on his office furnishings on May 1, 2020 in the amount of $4,050. 8. He issued a $1,800, 8-month, noninterest-bearing note for an expense item on June 1, 2020. The note was issued at an 8% discount. 9. He issued a $15,000, 9-month, 10% note for an expense item on August 1, 2019. He paid the note on May 1, 2020. 10. He sold a 20-month service contract to a client on December 1, 2020 in the amount of $6,400. He elected to use the deferral method for income recognition purposes. These services were not included in #1; this collection was not included in #2. 11. He was billed $1,600 by a local newspaper for advertising space during 2020. He has contested the amount of the bill. He has paid the bill. During 2020 the local newspaper agreed to reduce the bill to $1,250 in settlement of the dispute. He has not received the $250 refund from the local newspaper as yet. 12. One of his clients disputed the billing for services rendered during 2019. The bill was for $5,300. His client paid the bill during 2019. The dispute had not been settled by December 31, 2019 During 2020 he made a $300 refund to his client in settlement of the dispute. Required: 1. Determine the amount of the net profit from Green's business for 2020. 2. Determine the amount of income to be recognized during 2021 from the service contract in #10. I. Green operates a business that provides accounting services to his clients. He uses the accrual basis to report income and deductions for tax purposes. The following information is available concerning his business for 2020: 1. He billed his clients on open account for services rendered in the amount of $385,000. 2. He collected billings of $11,400 from 2019 and billings of $268,000 from 2020. 3. He received a $3,000, 4-month, 12% note on December 1, 2020 for services rendered during 2020; these services were not included in #1. 4. He received a $2,000, 6-month, noninterest-bearing note on September 1, 2019 for services rendered during 2019. The note was received at a 9% discount. He collected the note on March 1, 2020; this collection was not included in #2. 5. His employees earned wages of $213,000 during 2020. 6. He made payments to his employees of $16,500 for wages earned during 2019 and of $199,000 for wages earned during 2020. 7. He purchased an 18-month fire insurance policy on his office furnishings on May 1, 2020 in the amount of $4,050. 8. He issued a $1,800, 8-month, noninterest-bearing note for an expense item on June 1, 2020. The note was issued at an 8% discount. 9. He issued a $15,000, 9-month, 10% note for an expense item on August 1, 2019. He paid the note on May 1, 2020. 10. He sold a 20-month service contract to a client on December 1, 2020 in the amount of $6,400. He elected to use the deferral method for income recognition purposes. These services were not included in #1; this collection was not included in #2. 11. He was billed $1,600 by a local newspaper for advertising space during 2020. He has contested the amount of the bill. He has paid the bill. During 2020 the local newspaper agreed to reduce the bill to $1,250 in settlement of the dispute. He has not received the $250 refund from the local newspaper as yet. 12. One of his clients disputed the billing for services rendered during 2019. The bill was for $5,300. His client paid the bill during 2019. The dispute had not been settled by December 31, 2019 During 2020 he made a $300 refund to his client in settlement of the dispute. Required: 1. Determine the amount of the net profit from Green's business for 2020. 2. Determine the amount of income to be recognized during 2021 from the service contract in #10