Gentleman Ltd revealed the following balances for the year ended 30 June 2019. Account receivable balance was
Question:
Gentleman Ltd revealed the following balances for the year ended 30 June 2019.
Account receivable balance was $200,000 net of allowance for doubtful debts. During the year ended 30 June 2019, Gentleman Ltd has created an allowance for bad debts account and provided bad debts expenses of $25,000 for the year ended 30 June 2019.
Which one of the following is correct?
Select one:
None of these
Tax base of Account receivable is $175,000 and the business must account for deferred tax asset of $7,500 related to this item.
Tax base of Account receivable is $225,000 and the business must account for deferred tax liability of $7,500 related to this item.
Tax base of Account receivable is $200,000 and the business must account for deferred tax asset of $7,500 related to this item.
Tax base of Account receivable is $225,000 and the business must account for deferred tax asset of $7,500 related to this item.
Expert Answer:
The 200000 amount of accounts receivable is already net of allowance for doubtful accounts But in co... View the full answer
