Question: On June 2 , 2 0 2 0 , Fred's TV Sales sold Mark a large HD TV , on account, for $ 1 2

On June 2,2020, Fred's TV Sales sold Mark a large HD TV, on account, for $12,000. Fred's TV Sales uses the accrual method. In 2021, when the balance on the account was $8,000, Mark filed for bankruptcy. Fred was notified that he could not expect to receive any of the amount owed to him. In 2022, final settlement was made and Fred received $1,000. Which of the following is true?
Question 5 options:
Fred's TV will have a $8,000 deduction in 2021.
There will be no effect upon Fred's TV 2022 income or deductions.
Fred's TV will have a $7,000 deduction in 2022.
Fred's TV will have a $4,000 deduction in 2021.

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