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Question

Login Cengage "Wat the end of the eye'CengageNOWV21 × @Sign In or Signu × x n/takeAssignment/takeAssignmentMain.do?invoker-assignments&takeAssignmentSessionLocator-assignment-take;å Effect of Doubtful Accounts on Net Income During its first year of operations, Master Plumbing Supply Co. had sale method, and reported net income of $30,800. De estimated that 1 1/2% of sales would be uncollectible. s of $280,000, wrote off $4,500 of accounts as uncollectible using the direct write-off termine what the net income would have been if the allowance method had been used, and the company

Explanation / Answer

Net income originally reported $ 30,800 Add back: Baddebt expenses directly written off $    4,500 Less: Baddebt expenses as per allowance method ($280,000*1.5%) $ (4,200) Net income $ 31,100

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