An accrual-basis c corporation that prepared its financial statements based on gaap recorded $800,000 of bad debt expense. the total amount of bad debts that actually became worthless was $930,000. in respect to bad debt expense, what type of disclosure should the corporation show on schedule m-3

Complete Question:

A.A permanent bad debt expense difference of $130,000.

B.A temporary difference in which book deductions exceed tax deductions by $130,000.

C.A temporary difference in which tax deductions exceed book deductions by $130,000.

D.No difference between bad debt expense per income statement and deduction per tax return.

C.A temporary difference in which tax deductions exceed book deductions by $130,000.

Explanation:

As the book bad debt was $800,000 and the actual bad debt was $930,000. One can clearly see a difference of $130,000 and this is the amount which the book bad debt is increasing by. In this case of tax, bad debts becomes worthless in the year they are announced collectible.

answer; the cpi;

answer; monopolistic competition;