Petal, Inc The Amount of the Deduction for Bad Debt Expense for to Calculate

question 149

Multiple Choice

Petal, Inc.is an accrual basis taxpayer.Petal uses the aging approach to calculate the reserve for bad debts.During 2017, the following occur associated with bad debts. $\begin{array}{lr}\text { Credit sales } & \$ 400,000 \\\text { Collections on credit sales } & 250,000 \\\text { Amount added to the reserve } & 10,000 \\\text { Beginning balance in the reserve } & -0- \\\text { Identifiable bad debts during } 2017 & 12,000\end{array}$ The amount of the deduction for bad debt expense for Petal for 2017 is:

• A)$10,000.
• B)$12,000.
• C)$22,000.
• D)$140,000.
• E)None of the above.

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Definitions:

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Natural Behavior

The instinctual or innate actions and reactions of an animal or human, not influenced by conscious thought or societal norms.

Inclusive Fitness

A concept in evolutionary biology that considers an individual's success in passing genes to the next generation, including through relatives.

Reproductive Success

The success an organism achieves in passing its genes to the next generation, often measured by the number of offspring an organism produces that survive to reproduce.