During its first year of operations, Mack's Plumbing Supply Co. had sales of $370,000, wrote off $5,900 of accounts as uncollectible using the direct write-off method, and reported net income of $40,700. Determine what the net income would have been if the allowance method had been used, and the company estimated that 1.75% of sales would be uncollectible.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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During its first year of operations, Mack's Plumbing Supply Co. had sales of
$370,000, wrote off $5,900 of accounts as uncollectible using the direct
write-off method, and reported net income of $40,700.
Determine what the net income would have been if the allowance method
had been used, and the company estimated that 1.75% of sales would be
uncollectible.
Transcribed Image Text:During its first year of operations, Mack's Plumbing Supply Co. had sales of $370,000, wrote off $5,900 of accounts as uncollectible using the direct write-off method, and reported net income of $40,700. Determine what the net income would have been if the allowance method had been used, and the company estimated that 1.75% of sales would be uncollectible.
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