Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 8, Problem 8.15EX
Effect of doubtful accounts on net income
During its first year of operations, Mack’s Plumbing Supply Co. had sales of $3,250,000, wrote off $27,800 of accounts as uncollectible using the direct write-off method, and reported net income of $487,500. Determine what the net income would have been if the allowance method had been used and the company estimated that 1% of sales would be uncollectible.
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During its first year of operations, Mack’s Plumbing Supply Co. had sales of $410,000, wrote off $6,000 of accounts as uncollectible using the direct write-off method, and reported net income of $45,100.
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Chapter 8 Solutions
Corporate Financial Accounting
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