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Neo, Tutor
Category: Homework
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Experience:  BS Accounting
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Lance Lawn Services reports bad debt expense using the allowance

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Lance Lawn Services reports bad debt expense using the allowance method. For tax purposes, the expense is deducted when accounts prove uncollectible (the direct write-off method). At December 31, 2011, Lance has accounts receivable and an allowance for uncollectible accounts of $20 million and $1 million, respectively, and taxable income of $75 million. At December 31, 2010, Lance reported a deferred tax asset of $435,000 related to this difference in reporting bad debts, its only temporary difference. The enacted tax rate is 40% each year.

Prepare the appropriate journal entry to record Lance’s income tax provision for 2011.
Submitted: 5 years ago.
Category: Homework
Expert:  Neo replied 5 years ago.

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