On May 31, 2021, Joe's Car Lot sold Anthony a used car on account for $20,000. Joe's Car Lot uses the accrual method. In 2022, after $6,000 of payments had been made, Anthony filed for bankruptcy and Joe's Car Lot was notified that he could not expect to receive any of the amount owed to him. In 2023 final settlement was made and Joe's Car Lot received $7,000. How much bad debt loss can Joe's Car Lot deduct on his tax return in 2022? Options: a.) $3,000 b.) $0 c.) $14,000 d.) $7,000 e.) $6,000
On May 31, 2021, Joe's Car Lot sold Anthony a used car on account for $20,000. Joe's Car Lot uses the accrual method. In 2022, after $6,000 of payments had been made, Anthony filed for bankruptcy and Joe's Car Lot was notified that he could not expect to receive any of the amount owed to him. In 2023 final settlement was made and Joe's Car Lot received $7,000. How much bad debt loss can Joe's Car Lot deduct on his tax return in 2022? Options: a.) $3,000 b.) $0 c.) $14,000 d.) $7,000 e.) $6,000
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 53P
Related questions
Question
On May 31, 2021, Joe's Car Lot sold Anthony a used car on account for $20,000. Joe's Car Lot uses the accrual method. In 2022, after $6,000 of payments had been made, Anthony filed for bankruptcy and Joe's Car Lot was notified that he could not expect to receive any of the amount owed to him. In 2023 final settlement was made and Joe's Car Lot received $7,000. How much
Options:
a.) $3,000
b.) $0
c.) $14,000
d.) $7,000
e.) $6,000
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