During the first yea of operation family ventures, a boston based construction company, had sales of 4,350,000, wrote off 35,700 of accounts as uncollectible using direct write off method and reported net income of 521,000. If the company were to use the allowance method with uncollectible estimate of 1% of saes; Determine what the net income would have been under the allowance method

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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During the first yea of operation family ventures, a boston based construction company, had sales of 4,350,000, wrote off 35,700 of accounts as uncollectible using direct write off method and reported net income of 521,000.

If the company were to use the allowance method with uncollectible estimate of 1% of saes; Determine what the net income would have been under the allowance method

Expert Solution
Step 1

Estimate uncollectible amount = Sales x 1%

= 4,350,000 x 1%

= 43,500

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