Will is a proprietor who uses the cash method of accounting. During the current year he receive payments as follows: cash $100 for work he did this year a customer agreed to pay him 200 for services but hasnt paid yet. a customer friend gave him tickets valued at 250 with exchange for work done from him last year. will found a customers check for 170 for services preformed this year that he forgot to cash. How much income should will report on schedule C this year?
Mr. Will | |||
Computation of income as per Schedule C- (Cash Basis) | |||
Sl. No. | Transactions | Income($) | Explanations |
1 | Cash $100 for work he did this year | 100 | Cash received this year to be considered as income in cash basis |
2 | A customer agreed to pay him 200 for services but hasnt paid yet | - | Since no cash has been received this year, no income will be booked. |
3 | A customer friend gave him tickets valued at 250 with exchange for work done from him last year | 250 | Since consideration has been receieved in kind, hence income will be recognised |
4 | Will found a customers check for 170 for services preformed this year that he forgot to cash | 170 | Cheque received but not incashed is equivalent to cash received, hence income will be recognised |
Total income | 520 | ||
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