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During 2018, Leslies Boutique wrote off $13,000 in accounts receivable as uncollectible. At the end of this year, the accounts receivable balance was $256,400. Based
During 2018, Leslies Boutique wrote off $13,000 in accounts receivable as uncollectible. At the end of this year, the accounts receivable balance was $256,400. Based on past experience, it is expected that 4 percent of these accounts will prove uncollectible. In its 2017 tax return, Leslies Boutique had deducted a reserve for bad debts of $12,300. By what amount will the 2018 net business income of Leslies Boutique be increased or decreased by the preceding information with respect to bad debts?
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