18. Juan works as a landscaper for local businesses on weekends, and he often pr

Question

18. Juan works as a landscaper for local businesses on weekends, and he often provides services in exchange for property. This year Juan provided lawn-mowing services in exchange for $1,910 of car repair services, $5,450 of groceries, and a certificate of deposit (C.D.) for $3,900. The C.D. matures next year with interest. Finally, Juan received a gift card that can only be applied for $1,230 of clothing at a local mall. Juan has only applied the gift card to purchase $245 of clothing. Compute Juan's gross income assuming that he uses the cash basis of accounting.

Explanation / Answer

Solution: For cash basis accounting, income is realized on the receipt of property. Therefore, Juan;s income is $12,490 ($1,910+$5,450+$3,900+$1,230).

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