Henry works part-time on auto repairs and restoration projects. This year Henry

Question

Henry works part-time on auto repairs and restoration projects. This year Henry was paid $5,400 for repairs he made to his neighbor’s auto. Henry’s neighbor promised to pay Henry another $2,200 in cash next year. Henry’s brother borrowed $4,100 in cash in December of this year and gave him a negotiable promissory note for $4,300 due in three months with interest. Henry sold the note in January for $3,500. Henry restored a car for the football coach. The coach paid him with a pass to next year’s football games. The pass is worth $750. For other work that Henry performed for customers, he has also received a certificate of deposit (CD) for $4,050. The CD matures next year with interest. Finally, Henry received a gift card that can only be applied for $850 of clothing at a local mall. Henry has only used the gift card to purchase $100 of clothing. Compute Henry’s gross income assuming that he uses the cash basis of accounting. Show calc.

Explanation / Answer

Henry's gross income on cash accounting basis.

(Considering accounting period ended on 31st Dec)

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