# Problem 4-15 (Algorithmic) (LO. 2) Al is a physician who conducts his practice as a sole proprietor.

Problem 4-15 (Algorithmic) (LO. 2)

Al is a physician who conducts his practice as a sole proprietor. During 2019, he received cash of \$505,200 for medical services. Of the amount collected, \$51,600 was for services provided in 2018. At the end of 2019, Al held accounts receivable of \$91,400, all for services rendered in 2019. In addition, at the end of the year, Al received \$9,000 as an advance payment from a health maintenance organization (HMO) for services to be rendered in 2020.

a. Compute Al&#39;s gross income for 2019 using the cash basis of accounting. \$___________

b. Compute Al&#39;s gross income for 2019 using the accrual basis of accounting. \$____________

Problem 4-33 (LO. 10)

Apply the imputed interest rules in the following situations. If an amount is zero, enter “0”.

a. Mike loaned his sister Shonda \$90,000 to buy a new home. Mike did not charge interest on the loan. The Federal rate was 4%. Shonda earned \$900 of investment income for the year.

The imputed amount is \$ _______________

b. Nico&#39;s employer maintains an emergency loan fund for its employees. During the year, Nico&#39;s wife was very ill, and they incurred unusually large medical expenses. He borrowed \$8,500 from his employer&#39;s emergency loan fund for six months. The Federal rate was 4%. Nico and his wife earned no investment income for the year.

The imputed amount is \$ ________________

c. Jody borrowed \$25,000 from her controlled corporation for six months. She used the funds to pay her daughter&#39;s college tuition. The corporation charged Jody 3% interest. The Federal rate was 4%. Jody earned \$3,500 of investment income for the year.

The imputed amount is \$ ________________

d. Kait loaned her son, Jake, \$60,000 for six months. Jake used the \$60,000 to pay off college loans. The Federal rate was 4%, and Kait did not charge Jake any interest. Jake earned dividend and interest income of \$2,100 for the tax year.

The imputed amount is \$ _______________