When is the following income derived? (a) A karate instructor opened a karate school on 1 July CY and received fees in advance. However, where the full courses of lessons were not taken pupils received a refund. Fees received during the year amounted to $26,500. Fees received during the year in respect of lessons still to be taught amounted to$1,500? 

How much income is derived in the current year (b) Alanis a dentist who operates with the assistance of a full-time receptionist and 2 part-time dental therapists. Alan has issued bills of $500,000 of which he has received $450,000. Of the remaining $50,000, $22,000 represents work done for which the clients have arranged to pay off the bill in monthly instalments. The remaining $28,000 represents amounts on invoices sent out but not yet due. In addition to the $450,000 Alan also received $52,000 on amounts outstanding from last year and $15,000 time payments?

Answer rating: 100% (QA)

a In the case of the karate instructor income is generally recognized when it is earned not when cas... View the full answer