QUESTION 10 Eleanor is a sole proprietor who uses the cash basis for tax purposes. She operates a business named Bishop Accounting and Tax Services, In Y1, Benham hired Eleanor to help him with the accounting for his small business. Tracy also prepared the corporation income tax return for the business and Benham's personal income tax retum. Eleanor billed Benham $10,000 for the services she performed Benham has never paid any part of the bill, and in Y2 he and his business filed bankruptcy. Eleanor was notified by the Bankruptcy Court that she would likely only receive 30 cents on the dollar in Y3, the bankruptcy proceedings were finalized and Eleanor received $2,500 as a final payment. How much is deductible in each year as a bad lebt? a. Y1 - $0; Y2 - 50; Y3 - 50 b. Y1 - 50; Y2 - 50; Y3 - $7,500 OC Y1 - 50; Y2 - $7,000; Y3 - 5500 Od. Y1 - $0; Y2 - $7,500; Y3 - 50 e. Y1 - 50; Y2 - $10,000; Y3 - 50