Maria earns $50,000 from consulting contracts during the year. She collects only $48,000 from her clients and
Question:
Maria earns $50,000 from consulting contracts during the year. She collects only
$48,000 from her clients and expects the $2,000 will remain uncollectible.
a. If Maria’s business is on the accrual basis, what is her gross income for the year and how much can she deduct for bad debt expense?
b. If Maria’s business is on the cash basis, what is her gross income for the year and how much can she deduct for bad debt expense?
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Related Book For 
Taxation For Decision Makers 2008
ISBN: 9780324654110
2nd Edition
Authors: Shirley Dennis-Escoffier, Karen A. Fortin
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