Tax Accrual Basis

2019 2020
Cash Income 500,000 800,000
Accrued Income 500,000 400,000
Collection for future services-advances 300,000 200,000
Total Gross Income: 1,300,000 1,400,000
Less: Cash Expenses 400,000 600,000
Accrued Expenses 100,000 150,000
Amortization of 2019 prepaid
Expenses 200,000
Total Deductions: 500,000 950,000

Net Income: 800,000 450,000

Tax Cash Basis

2019 2020
Collections from services rendered 500,000 1,270,000
Collections for future services ad 300,000 200,000
Total Gross Income: 800,000 1,470,000
Less: Payment of expenses 400,000 700,000
Amortization of 2019 prepayments 200,000
Total Deduction: 400,000 900,000

Net Income: 400,000 570,000

Percentage of Completion Method

2021 2022
Contract Price 5,000,000 5,000,000
X Percentage of Completion 70% 100%
Value of work completed 3,500,000 5,000,000
Less: cost-to-date (cumulative cost) 3,000,000 1,200,000
Total Income: 500,000 3,800,000
Less: Income Reported in previous year 500,000
Income in current year: 3,300,000