Perle, a dentist, billed Wood $600 for dental services. Wood paid Perle $200 cash and built a bookcase for Perle’s office in ful

Question

3 years ago

14

Perle, a dentist, billed Wood $600 for dental services. Wood paid Perle $200 cash and built a bookcase for Perle’s office in ful

l settlement of the bill. Wood sells comparable bookcases for $350. What amount should Perle include in taxable income as a result of this transaction?

Business

1 answer:

Naddika [18.5K] · Answer 1 · 2022-05-06T02:31:06+03:00

Answer:$600

Explanation:

The full amount of$600 will be credited to Perle as his service income on completion of the dental services and debited to wood account as a debtor.

The $200 will reduce the debt to $400 , the $400 which will be recorded through a journal by debiting bookcase and crediting Wood.

Narration. Recognition of bookcase built as debt payment.