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PDtax
PDtax, CPA, MBA
Category: Finance
Satisfied Customers: 4677
Experience:  Tax professional and business consultant for 35 years.
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Inventory 2015 $30,608 2016 $11,374 Acct Payable 2015

Customer Question

inventory 2015 $30,608 2016 $11,374Acct Payable 2015 $102,872 2016 $41,791Acct Receivable 2015 $ $94,038 2016 $157,190
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: My question is with these changes in my balance sheet,if i am on accrual basis S corp....how is my income affected,
JA: Is there anything else the Accountant should be aware of?
Customer: no
Submitted: 1 month ago.
Category: Finance
Expert:  Manal Elkhoshkhany replied 1 month ago.

Hello,

is this a real world situation or a school problem? If it is a school problem, please post the full problem

Thank you

Customer: replied 1 month ago.
Real world
Expert:  Manal Elkhoshkhany replied 1 month ago.

Thank you :) I will opt out then and let another expert who is qualified to address the question help.

All the best

Expert:  PDtax replied 1 month ago.

I'mCustomer I see you need an expert. I can assist.

You can assume that your tax cash income should remove the a/r difference of 63,152 from income. Then add 61,081 for the payables effect. The difference almost washes out.

Thanks for asking at just answer. Positive feedback and a bonus if warranted are appreciated. I'mCustomer

Customer: replied 1 month ago.
Please make no assumptions about cash. Only the information provided.For example please confirm.As AR Increases profits increaseIf inventory increases profits increaseIf AP increases profits decrease.Thanks
Expert:  PDtax replied 1 month ago.

No assumption about cash made.

Meet increase in receivables increased accrual basis income. If you start with accrual basis, removing receivables decreases income for cash basis.

Decreases in payables decrease cash basis income as those reductions are treated as current year expenses.

Customer/p>