Effect of doubtful accounts on net income
During its first year of operations, Mack's Plumbing Supply had sales of $ wrote off $ of accounts as uncollectible using the direct writeoff method, and reported net income of $
Assume that during the second year of operations Mack's Plumbing Supply had sales of $ wrote off $ of accounts as uncollectible using the direct writeoff method, and reported net income of $
a Determine what net income would have been in the second year if the allowance method using of sales had been used in both the first and second years.
fill in the blank of $
b Determine what the balance of the allowance for doubtful accounts would have been at the end of the second year if the allowance method had been used in both the first and second years. If required, use the minus sign to indicate a "debit" balance.
fill in the blank of $
