Question
Fact pattern 2---ABC has a beginning allowance for doubtful accounts of $40,000. During the current year ABC added to the allowance an additional $10,000 based
Fact pattern 2---ABC has a beginning allowance for doubtful accounts of $40,000. During the current year ABC added to the allowance an additional $10,000 based on current year sales activity. Also, during the year, ABC specifically identified and wrote off $12,000 of Receivables after exhausting all commercially reasonable remedies. Thus, the ending allowance for doubtful accounts is $38,000.
Question 3under the cash method what is ABCs Bad Debt Expense?
Question 4under the accrual method for tax purposes what is ABCs Bad Debt Expense?
Question 5under the accrual method for tax purposes what is the current year net book/tax difference? $12,000 -$10,000 = $2,000
Question 6under the accrual method for tax purposes what is the originating book/tax difference in the current year?
Question 7Further to Question 6is it unfavorable or favorable?
Question 8under the accrual method for tax purposes what is the reversing book/tax difference in the current year?
Question 9further to Question 8is it unfavorable or favorable?
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