GK Company, a calendar year accrual basis taxpayer, made the following adjustments to its allowance for...
GK Company, a calendar year accrual basis taxpayer, made the
following adjustments to its allowance for bad debts this
year:
| January 1 allowance for bad debts | $ | 86,400 | ||
| Actual write-offs of accounts receivable | (77,600 | ) | ||
| Addition to allowance at year-end | 90,300 | |||
| December 31 allowance for bad debts | $ | 99,100 | ||
- Compute GK's bad debt expense for financial statement purposes.
- Compute GK's tax deduction for bad debts.
Homework Answers
| a |
| Bad debt expense for financial statement purposes is the Addition to allowance at year-end . |
| Bad debt expense = 90300 |
| b |
| The amount allowed as Tax deduction is the Actual write-offs of accounts receivable during the year. |
| Tax deduction = 77600 |
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