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	$	86,400
Actual write-offs of accounts receivable		(77,600	)
Addition to allowance at year-end		90,300
December 31 allowance for bad debts	$	99,100

1. Compute GK's bad debt expense for financial statement purposes.
2. Compute GK's tax deduction for bad debts.