Question
2-MG is an accrual basis corporation. In 20x6, it wrote off a $65,000 account receivable as uncollectible. In 20x7, it received a $65,000 check from
2-MG is an accrual basis corporation. In 20x6, it wrote off a $65,000 account receivable as uncollectible. In 20x7, it received a $65,000 check from the creditor in full payment of this receivable.
a) Describe the effect of the write-off of the receivable on MGs 20x6 financial statement income and taxable income? (Deductible or not)
b) What was the effect of the collection of the receivable on MGs 20x7 financial statement income and taxable income?
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Ethical Issues In Business A Philosophical Approach
Authors: Thomas Donaldson, Patricia H. Werhane, Margaret Cording
7th Edition
0130923877, 978-0130923875
