Al is a medical doctor who conducts his practice as a sole proprietor. During 2014, he received cash of $280,000 for medical services. Of the amount collected, $40,000 was for services provided in 2013. At the end of 2014, Al held accounts receivable of $60,000, all for services rendered in 2014. In addition, at the end of the year, Al received $12,000 as an advance payment from a health maintenance organization (HMO) for services to be rendered in 2015. Compute Al's gross income for 2014:
a. Using the cash basis of accounting.
b. Using the accrual basis of accounting.

  • CreatedMay 25, 2015
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