Ben teaches golf lessons at a country club under a business called Ben’s Pure Swings (BPS)....

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Ben teaches golf lessons at a country club under a businesscalled Ben’s Pure Swings (BPS). He operates this business as a soleproprietorship on the accrual basis of accounting. This year BPSbilled clients for $86,700 and collected $61,000 in cash for golflessons completed during the year. In addition, BPS collected anadditional $14,500 in cash for lessons that will commence afteryear end. Ben hopes to collect about half of the outstandingbillings next year but the rest will likely be writtenoff.
Besides providing private golf lessons, BPS also contracted withthe country club to staff the driving range. This year BPS billedthe country club $27,200 for the service. The club paid $18,000 ofthe amount but disputed the remainder. By year end the dispute hadnot been resolved, and while Ben believes he is entitled to themoney, he has still not collected the remaining $9,200.
Continuing the facts from the prior question, BPS has accruedthe following expenses (explained below):

               BadDebtexpense                                    $12,850
               Advertising(in theclubhouse)                      13,150
               ProGolf Teachers MembershipFees              860
               Supplies(golf tees, balls,etc.)                        4,720
               ClubRental                                                      6,800
               MalpracticeInsurance                                     1,200
               AccountingFees                                             9,820
The expenditures were all paid for this calendar year withseveral exceptions. First, Ben initiated his golfer’s malpracticeinsurance on July 1^st of this year. The $1,200 insurancebill covers the last six months of this calendar year and the firstsix months of next year. At year end Ben had only paid $600, but hehas assured the insurance agent he would pay the remaining $600early next year. Second, the amount paid for club rental ($100 perweek) represents rental charges for the last six weeks of theprevious year, for the 52 weeks in this calendar year, and thefirst 10 weeks of next year. Ben has also mentioned that BPS onlypays for supplies that are used at the club. Although BPS could buythe supplies for half the cost elsewhere, Ben likes to “throw somebusiness” to the golf pro shop because it is operated by hisbrother.
What is the amount of deductions claimed by BPS? (Excelspreadsheet template is provided)

Answer & Explanation Solved by verified expert

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AnswerUnder the gathering strategyincome are by and large record under the all occasions test asearned or got Henceforth except if the deferraltechnique race has been made BPS will perceive 101200 ofexercise income 86700 14500 101200 this year See Answer

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Transcribed Image Text

Ben teaches golf lessons at a country club under a businesscalled Ben’s Pure Swings (BPS). He operates this business as a soleproprietorship on the accrual basis of accounting. This year BPSbilled clients for $86,700 and collected $61,000 in cash for golflessons completed during the year. In addition, BPS collected anadditional $14,500 in cash for lessons that will commence afteryear end. Ben hopes to collect about half of the outstandingbillings next year but the rest will likely be writtenoff. Besides providing private golf lessons, BPS also contracted withthe country club to staff the driving range. This year BPS billedthe country club $27,200 for the service. The club paid $18,000 ofthe amount but disputed the remainder. By year end the dispute hadnot been resolved, and while Ben believes he is entitled to themoney, he has still not collected the remaining $9,200.Continuing the facts from the prior question, BPS has accruedthe following expenses (explained below): BadDebtexpense $12,850 Advertising(in theclubhouse) 13,150 ProGolf Teachers MembershipFees 860 Supplies(golf tees, balls,etc.) 4,720 ClubRental 6,800 MalpracticeInsurance 1,200 AccountingFees 9,820The expenditures were all paid for this calendar year withseveral exceptions. First, Ben initiated his golfer’s malpracticeinsurance on July 1st of this year. The $1,200 insurancebill covers the last six months of this calendar year and the firstsix months of next year. At year end Ben had only paid $600, but hehas assured the insurance agent he would pay the remaining $600early next year. Second, the amount paid for club rental ($100 perweek) represents rental charges for the last six weeks of theprevious year, for the 52 weeks in this calendar year, and thefirst 10 weeks of next year. Ben has also mentioned that BPS onlypays for supplies that are used at the club. Although BPS could buythe supplies for half the cost elsewhere, Ben likes to “throw somebusiness” to the golf pro shop because it is operated by hisbrother.What is the amount of deductions claimed by BPS? (Excelspreadsheet template is provided)