USA Calculation for accrual to cash/tax basis net income


Joined
Jan 22, 2019
Messages
2
Reaction score
0
Country
us
We use Sage Contractor 100 for our company books which solely runs on accrual basis. However, our tax returns our prepared on a cash basis and we can take the full Section 179 deduction for equipment purchased. We are a home builder so we do have WIP so for example a job closed in 2018 would have had some WIP inventory at the end of 12.31.2017. Is this the correct calculation to get to our cash/tax basis net income:


2018 Accrual to Cash/Tax Basis Net Income

Accrual Basis Net Income
Less Current Year A/R
Plus Prior Year A/R
Less Prior Year A/P
Plus Current Year A/P
Less 2018 Depreciation Expense - Full Section 179 deduction
Cash Basis Net Income
 
Ad

Advertisements

kirby

VIP Member
Joined
May 12, 2011
Messages
1,507
Reaction score
210
Country
us
Basic idea is to remove effect of all accruals and all noncash revenues and noncash expenses. This is what you have done so you are ok. Be sure that removing current year AP causes an INCREASE to cash basis income.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top