Marketplace, Inc. has recognized over time that a certain percentage of its customer accounts receivable will not be collected. To ensure the appropriate matching of revenues and expenditures in its financial reports, Marketplace uses the reserve method for bad debts. Records show the following pertaining to its treatment for bad debts.

Beginning allowance for bad debts $120,000

Ending allowance for bad debts $123,000

Bad debts written off during the year $33,000

a. What was the bad debt expense for financial accounting purposes during the year?

b. What was the bad debt expense for income tax purposes during the year?

c. Assuming the before-tax net income for financial accounting purposes was $545,000, what is the taxable income for the year if the treatment of bad debts is the only book-tax difference?