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Problem 4 - 3 1 ( Algorithmic ) ( LO . 2 , 5 ) Al is a medical doctor who conducts his practice as
Problem AlgorithmicLO
Al is a medical doctor who conducts his practice as a sole proprietor. During he received cash of $ for medical services. Of
the amount collected, $ was for services provided in At the end of Al had accounts receivable of $ all for
services rendered in In addition, at the end of the year, Al received $ as an advance payment from a health maintenance
organization HMO for services to be rendered in
a Compute Al's gross income for using the cash basis of accounting.
$
b Compute Al's gross income for using the accrual basis of accounting.
$
c Advise Al on which method of accounting he should use.
Al should use the.
of accounting so that he will not have to pay income taxes on the
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