Mosh, a sole proprietor, uses the cash basis of accounting. At the beginning of the current year, accounts receivable were $25,0

Question

3 years ago

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Mosh, a sole proprietor, uses the cash basis of accounting. At the beginning of the current year, accounts receivable were $25,0

00. During the year, Mosh collected $100,000 from customers. At the end of the year, accounts receivable were $15,000. What was Mosh's gross taxable income for the current year?a. $110,000b. $100,000c. $90,000d. $75,000

Business

1 answer:

Dahasolnce [82] · Answer 1 · 2022-08-19T21:16:13+03:00

Answer:

b. $100,000

Explanation:

Provided information

Beginning balance of account receivable = $25,000

Collection from customers = $100,000

Ending balance of account receivable = $15,000

Since we have to find out the gross taxable income, so we considered only the collection from customers as this is the amount which is received and therefore, it has come under the gross taxable income i.e $100,000.