Polo Co. (a C corporation) had $300,000 in operating income and $50,000 in operating expenses during...

Polo Co. (a C corporation) had $300,000 in operating income and $50,000 in operating expenses during the year. In addition, Polo had a $11,000 LTCG and a ($30,000) STCL. What is Polo’s taxable income?
Al is an attorney who operates his law practice as a sole proprietor. During 2019, he received cash of $190,000 for legal services. Of the amount collected, $25,000 was for services rendered back in 2018. At the end of 2019, Al had outstanding accounts receivable of $40,000, all for services rendered in 2019. Included in the accounts receivable was $10,000 that was charged to a client who died in early 2020. During 2020, Al has now learned he has no hope of collecting the balance due from the client’s estate. Compute Al’s Gross Income for 2019:
1. Using cash basis
2. Using accrual basis

Expert Solution

Answer :-

1) taxable income

300000-50000 = 250000

30000-11000 = 19000

2)

Cash basis = 190000

Accrual basis = 190000 + 40000 - 10000 =220000

ekkarill92 answered 2 years ago

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