Chapter 6, Problem 4P

a

To determine

Introduction:A taxpayer must report taxable income using the same method which he uses for maintaining accounting records and the method that clearly reflects the taxpayer’s income. The standard methods used are cash receipt method, accrual method, and hybrid method of accounting.

The treatment of deductible contribution to IRA on April 15, 2020 when cash basis reporting is used.

b

To determine

Introduction: A taxpayer must report taxable income using the same method which he uses for maintaining accounting records and the method that clearly reflects the taxpayer’s income. The standard methods used are cash receipt method, accrual method, and hybrid method of accounting.

The treatment of election to accrue the increase in value of savings bonds even though the increase is not received in cash

c

To determine

Introduction: A taxpayer must report taxable income using the same method which he uses for maintaining accounting records and the method that clearly reflects the taxpayer’s income. The standard methods used are cash receipt method, accrual method, and hybrid method of accounting.

The treatment of prepayments of half yearly interest in advance on mortgage on the last day of 2019 when cash basis reporting is used.

d

To determine

Introduction: A taxpayer must report taxable income using the same method which he uses for maintaining accounting records and the method that clearly reflects the taxpayer’s income. The standard methods used are cash receipt method, accrual method, and hybrid method of accounting.

The treatment of payments of all outstanding invoices for standard business expenses in the last week of December.

e

To determine

Introduction: A taxpayer must report taxable income using the same method which he uses for maintaining accounting records and the method that clearly reflects the taxpayer’s income. The standard methods used are cash receipt method, accrual method, and hybrid method of accounting.

The treatment of big bill issued to customer on January 1, 2020 even though all the work is done in December of 2019.