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Research Problem 2. Your client, Vernon Jones, is a self-employed attorney. Vernon uses the cash method of accounting. In reviewing his accounting records to get ready to prepare his tax return for the current year, you find an entry in December about a lost check. In discussing this with Vernon, you learn that a client wrote him a check for $82,000 for services Vernon provided. Unfortunately, Vernon lost the check and still is waiting for a replacement check from the client. Is the $82,000 gross income in the year Vernon received the check that he lost, or is it taxed in the subsequent year when he receives the replacement check? Summarize

Research Problem 2. Your client, Vernon Jones, is a self-employed attorney. Vernon uses the cash method of accounting. In reviewing his accounting records to get ready to prepare his tax return for the current year, you find an entry in December about a lost check. In discussing this with Vernon, you learn that a client wrote him a check for $82,000 for services Vernon provided. Unfortunately, Vernon lost the check and still is waiting for a replacement check from the client. Is the $82,000 gross income in the year Vernon received the check that he lost, or is it taxed in the subsequent year when he receives the replacement check? Summarize

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Research Problem 2. Your client, Vernon Jones, is a self-employed attorney. Vernon uses the cash method of accounting. In reviewing his accounting records to get ready to prepare his tax return for the current year, you find an entry in December about a lost check. In discussing this with Vernon, you learn that a client wrote him a check for $82,000 for services Vernon provided. Unfortunately, Vernon lost the check and still is waiting for a replacement check from the client. Is the $82,000 gross income in the year Vernon received the check that he lost, or is it taxed in the subsequent year when he receives the replacement check? Summarize
Transcribed Image Text:Research Problem 2. Your client, Vernon Jones, is a self-employed attorney. Vernon uses the cash method of accounting. In reviewing his accounting records to get ready to prepare his tax return for the current year, you find an entry in December about a lost check. In discussing this with Vernon, you learn that a client wrote him a check for $82,000 for services Vernon provided. Unfortunately, Vernon lost the check and still is waiting for a replacement check from the client. Is the $82,000 gross income in the year Vernon received the check that he lost, or is it taxed in the subsequent year when he receives the replacement check? Summarize
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