Petal, Inc.is an accrual basis taxpayer.Petal uses the aging approach to calculate the reserve for bad debts.During 2012, the following occur associated with bad debts. The amount of the deduction for bad debt expense for Petal for 2012 is:

Question

Petal, Inc.is an accrual basis taxpayer.Petal uses the aging approach to calculate the reserve for bad debts.During 2012, the following occur associated with bad debts.  The amount of the deduction for bad debt expense for Petal for 2012 is:

Quizplus · Accepted Answer

Using the aging approach, Petal has calculated that $14,000 in accounts receivable are estimated to be uncollectible. This amount is then recorded as bad debt expense, which is deductible on the tax return. Therefore, the amount of the deduction for bad debt expense for Petal for 2012 is $14,000.