please help Ch 9-3 Exercises & Problems Effect of Doubtful Accounts...
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Ch 9-3 Exercises & Problems Effect of Doubtful Accounts on Net Income During its first year of operations, Mack's Plumbing Supply Co. had sales of $540,000, wrote off $8,600 of accounts as uncollectible using the direct write-off method, and reported net income of $59,400. Determine what the net income would have been if the allowance method had been used, and the company estimated that 1 3/4% of sales would be uncollectible. $ 64,300 x Feedback Check My Work Under the direct write-off method, Bad Debt Expense is recorded when the customer's account is determined to be worthless and written-off. There is no adjusting entry at year-end to record estimated bad debt. To compute net income using the allowance method, first compute net income before write-off of accounts associated with the bad debt expense. Then determine how an amount estimated for Bad Debt Expense based on a percent of sales would affect that net income
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