For 2019, Essence Company, a calendar year taxpayer, will change from using the cash method for tax

Question:

For 2019, Essence Company, a calendar year taxpayer, will change from using the cash method for tax purposes to the accrual method. At the end of 2018, Essence showed the following items.

Accounts receivable...........................$200,000
Accounts payable..................................135,000
Bank loan...............................................100,000

What is the § 481(a) adjustment for this change in accounting method? Be sure to state whether it is positive or negative.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

South-Western Federal Taxation 2020 Comprehensive

ISBN: 9780357109144

43rd Edition

Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman

Question Posted: