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

To calculate the reserve for bad debts, Petal uses the aging approach, which estimates the percentage of uncollectible accounts based on the age of the accounts. According to the aging schedule provided, the total estimated bad debt expense for 2012 is $14,000 ($4,000 + $6,000 + $4,000). Therefore, the amount of the deduction for bad debt expense for Petal for 2012 is $14,000.