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8 November, 17:31

Manley operates a law practice on the accrual method and calendar year. at the beginning of the year manley's firm had an allowance for doubtful accounts with a balance of $15,000. at the end of the year, manley recorded bad debt expense of $23,000 and the balance of doubtful accounts had increased to $18,000. what is manley's deduction for bad debt expense this year?

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  1. 8 November, 20:36
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    The bad debts expense signifies the straight write off of the bad accounts which is the $20,000 along with an increase in the allowance which is an approximation of the bad accounts to be written off in the future which is the $3,000. The growth in the allowance account cannot be subtracted.
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