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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


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 ………………………. $86,100

Actual write-offs of accounts receivable ………………… (77,300)

Addition to allowance at year-end ………………………. 90,000

December 31 allowance for bad debts …………………… $98,800

a. Compute GK’s bad debt expense for financial statement purposes.

b. Compute GK’s tax deduction for bad debts.

Apr 02 2020 View more View Less

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