PlanningAl is a medical doctor who conducts his practice as a sole proprietor. During 2023, he received cash of$280,000 for medical services. Of the amount collected, $40,000 was for services provided in 2022. At the endof 2023, Al had accounts receivable of $60,000, all for services rendered in 2023. In addition, at the end of theyear, Al received $12,000 as an advance payment from a health maintenance organization (HMO) forservices to be rendered in 2024. Compute Al's gross income for 2023: (LO.2,, 5)a. Using the cash basis of accounting.b. Using the accrual basis of accounting.c. Advise Al on which method of accounting he should use.

Detailed explanation:a. cash basis : cash received in 2023$ 280,000advanced payment received from…

Answered: Planning Al is a medical doctor who…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 32P

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Tia is married and is employed by Carrera Auto Parts. In 2019, Carrera established high-deductible health insurance for all its employees. The plan has a 2,700 deductible for married taxpayers. Carrera also contributes 5 percent of each employees salary to a Health Savings Account. Tias salary is 30,000 in 2019 and 32,000 in 2020. Tia makes the maximum allowable contribution to her HSA in 2019 and 2020. She received 600 from the HSA for her 2019 medical expenses. In 2020, she spends 1,400 on medical expenses from her HSA. The MSA earns 28 in 2019 and 46 in 2020. a. What is the effect of the HSA transactions on Tias adjusted gross income? b. How much does Tia have in her HSA account at the end of 2020?
Al is a medical doctor who conducts his practice as a sole proprietor. During 2023, he received cash of $490,000 for medical services. Of the amount collected, $33,600 was for services provided in 2022. At the end of 2023, Al had accounts receivable of $94,800, all for services rendered in 2023. In addition, at the end of the year, Al received $9,500 as an advance payment from a health maintenance organization (HMO) for services to be rendered in 2024. a. Compute Al's gross income for 2023 using the cash basis of accounting. Feedback Check My Work b. Compute Al's gross income for 2023 using the accrual basis of accounting.
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