P.Q. Enterprises operates a wholesale business. Most of its sales are made on credit. Accounts receivable, therefore,
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In addition, the company loaned $15,000 to a former friend of the owner, charging 13% interest. This loan is also considered to be doubtful, as the friend refuses to acknowledge the existence of the debt.
Required:
1. What amount, if any, can be deducted from income in this particular year?
2. Assume that in the next year the doubtful accounts of $25,000 are re-analyzed, with the following results:
Still doubtful ……………....……..$15,000
Considered good………………….. 4,000
Legally bankrupt…………….…….. 6,000
………………………………........……$25,000
What is the tax impact in this second year? 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...
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Related Book For
Canadian Income Taxation Planning And Decision Making
ISBN: 9781259094330
17th Edition 2014-2015 Version
Authors: Joan Kitunen, William Buckwold
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