 |
|
| Browse | Ask | Answer | Search | Join/Login |
|
|
||||
|
Bsuiness bad debt #1
:) I am trying to some research to see if I can deduct a business bad debt. In an example from a book, I run into a sentence like this:
Bad debt expense (of the $4000 reserve established, $500 was written off as being currently uncollectible). Does it mean I can deduct $500 only? Or the other way around, I can deduct $3500? What does "reserve established" mean? Big big big thanks. |
||||
|
||||
|
Reserve established means the amount reserved for uncollectable accounts. Usually is a percentage on aging accounts receivable. It means out of all these receivable, we estimate such amount will not be collected.
The $500 is realized bad debt. Say, that company that owes us money went out of business and has no asset left, we have no hope of getting the payment, and therefore, what they owe us should be written off. You may be able to deduct $500 but definitely not $3,500. |
||||
| Question Tools | Search this Question |
Add your answer here.
Check out some similar questions!
I have a 25thousand bad debt lawsuit from a surgery I had (thought my insurance should cover) now the creditor is calling my husband and my employer for wage garnishment, we live pay check to pay check Really. How do I get them to not do this or at least wait until we find some help (where to find...
Can someone help with the following accounting exercise? The following info was listed in company X balance sheet as of 2005 Aacounts Rec for 2004 150,000 Aacounts Rec for 2005 250,000 Allowance for bad debt in 2004 was 8,200 Allowance for bad debt in 2005 was 12,000
Hi, my question is regarding my old account with Capital One Services. Under Pay Status: It is listed as <Charged Off as Bad Debt>, then under Remark: >Settled - less than full balance< I had no choice at that time, but to accept their offer and pay it off as stated above. Date Opened: 4/1999,...
View more questions Search
|
