On Dec. 15, 2019, Taxpayer hired a roofing company to repair leaks in the roof of Taxpayer's business-use warehouse. The repairs were completed on Dec. 22, 2019. The roofing company invoiced taxpayer for $100,000 on January 3, 2020, and Taxpayer paid the invoice on Feb. 1, 2020. If Taxpayer is an accrual-method taxpayer, how much of $100,000 repair expense can Taxpayer deduct in 2020

Taxpayer

As an accrual-method taxpayer, the amount out of the $100,000 that the taxpayer can deduct in 2020 is:

= $0.

Explanation:

a) Data:

Cost of the repair of roof of business-use warehouse = $100,000

Repairs completed on December 22, 2019

Invoice received on January 3, 2020

Invoice paid on February 1, 2020

b) Accrual basis requires that expenses are matched to the period in which they are incurred and not when payment is received.  The expense for the roof repairs was incurred in 2019 and should be expensed in 2019 and not 2020.

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.

answer; intensive use of a sales force and is relatively costly;