Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

During its 2021 fiscal period, Leslie's Boutique, a sole proprietorship, wrote off $13,000 in bad debts. At the end of its 2021 fiscal period the

During its 2021 fiscal period, Leslie's Boutique, a sole proprietorship, wrote off $13,000 in bad debts. At the end of its 2021 fiscal period the accounts receivable balance was $256,400. Based on past experience, it is expected that 4% of these accounts will prove uncollectible. A detailed analysis of 2021 receivables applying the approach acceptable to the CRA results in a doubtful debt reserve of $8,780. In its 2020 fiscal period, Leslie's Boutique had claimed a reserve for doubtful debts of $12,300. By what amount will the business income of Leslie's Boutique for the 2021 fiscal period be increased or decreased as a result of these accounts receivables transactions?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions