At the end of 2019, Barton's Books has ending accounts receivable of $87,500. Of this amount, it is estimated that $3,400 would prove uncollectible. A reserve for tax purposes is deducted for this amount. During 2020, $3,600 of accounts receivable are written off. At the end of 2020, accounts receivable total $103,200, with $4,100 of this amount expected to be uncollectible. By what amount will the 2020 net business income of Barton's Books be increased or decreased by the preceding information with respect to bad debts?

Question

Quizplus · Accepted Answer

The Answer of At the end of 2019, Barton's Books has ending accounts receivable of $87,500. Of this amount, it is estimated that $3,400 would prove uncollectible. A reserve for tax purposes is deducted for this amount. During 2020, $3,600 of accounts receivable are written off. At the end of 2020, accounts receivable total $103,200, with $4,100 of this amount expected to be uncollectible. By what amount will the 2020 net business income of Barton's Books be increased or decreased by the preceding information with respect to bad debts?

At the End of 2019, Barton's Books Has Ending Accounts