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Haskins and Jones, Attorneys at Law, maintain its books on a cash basis. During 2016, the company collected $545,000 in fees from its clients and paid out $412,000 in expenses. You are able to determine the following information about accounts receivable, prepaid expenses,deffered fee revenue and accrued liabilities.
Jan 1 2016. Dec 31 2016
Accounts
receivable. 62,000. 55,000
prepaid
insurance. 4,500. 6,000
rent. 9,200. 8,200
deferred fee
revenue 9,200. 11,000
Accrued
liabilities
(for various
expenses) 12,200. 15,600
In addition, 2016 depreciation expensr o furniture and fixtures is 22,000.
Required Determine accrual basis nst income for 2016.
A nation has a tax rate of 20% on the first $20,000 of taxable income, 30% on the next $30,000, 40% on the next $20,000 and then 50% on all taxable income above $70,000.
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