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Problem 4-32 (b) (LO. 2) Brad operates a hardware store. He maintains the books using the cash method. At the end of the year, his
Problem 4-32 (b) (LO. 2) Brad operates a hardware store. He maintains the books using the cash method. At the end of the year, his accountant computes his accrual basis income that is used on his tax return. For 2017, Brad had cash receipts of $2,200,000, which inluded $750,000 collected on accounts receivable from 2016 sales. At the end of 2017, he had $910,000 in accounts receivable from customers, all from 2017 sales. Brad paid cash for all of the purchases. The total amount he paid for merchandise in 2017 was $1,100,000. At the end of 2016, he had merchandise on hand with a cost of $165,00o. At the end of 2017, the cost of merchandise on hand was $140,000. Brad's accrual basis gross receipts for 2017 are The cost of goods sold for 2017 under the accrual method is The gross profit from merchandise sales for 2017 under the accrual basis is
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