GK Company, a calendar year accrual basis taxpayer, made the following adjustments to its allowance for bad

Question:

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 ………………………. $86,100
Actual write-offs of ………………… (77,300)
Addition to allowance at year-end ………………………. 90,000
December 31 allowance for bad debts …………………… $98,800
a. Compute GK’s bad debt expense for financial statement purposes.
b. Compute GK’s tax deduction for bad debts.
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...