Question

Will is a proprietor who uses the cash method of accounting. During the current year he...

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?

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Answer #1
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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