Problem $4-31($Algorithmic$)($LO$.2,5)$

Al is a medical doctor who conducts his practice as a sole proprietor. During $2022,$ he received cash of $$471,000$ for medical services. Of the amount collected, $$37,200$ was for services provided in $2021.$ At the end of $2022,$ Al had accounts receivable of $$96,500,$ all for services rendered in $2022.$ In addition, at the end of the year, Al received $$15,500$ as an advance payment from a health maintenance organization $($HMO$)$ for services to be rendered in $2023.$

a$.$ Compute Al's gross income for $2022$ using the cash basis of accounting.

$

Feedback

Theck My Work

The year an item of income is subject to tax often depends upon which acceptable accounting method the taxpayer regularly employs. The three primary methods of accounting are $(1)$ the cash receipts and disbursements method, $(2)$ the accrual method, and $(3)$ the hybrid method. Most individuals use the cash receipts and disbursements method of accounting, whereas most larger corporations use the accrual method.

b$.$ Compute Al's gross income for $2022$ using the accrual basis of accounting.

$ $$

Feedback

$$ Check My Work

Incorrect