Compute al''s gross income for 2011

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Reference no: EM13132987

Al is a medical doctor who conducts his practice as a sole proprietor. During 2011, he received cash of $280,000 for medical services. Of the amount collected, $40,000 was for services provided in 2010. At the end of 2011, Al had accounts receivable of $60,000, all for services rendered in 2011. 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 2012. Compute Al's gross income for 2011"

a) Using the cash basis of accounting.
b) Using the accrual basis of accounting.
c) Advise Al on which method of accounting he should use.

Reference no: EM13132987

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