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Effect of Doubttul Accounts on Net Income During its first year of operations, Mack's Plumbing...

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Accounting

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Effect of Doubttul Accounts on Net Income During its first year of operations, Mack's Plumbing Supply Co. had sales of $230,000, wrote off $3,000 of accounts as unoolectible using the direct write-off method, and reported net income of $25,300 Assume that during the second year of operations Mack's Plumbing Supply Co. had sales of $276,000, wrote off $3,600 of accounts as uncollectible using the direct write-oft method, and reported net income of $27,600. a. Dete mine what net income would have been in the second year ine alowance method using 1-1/2% of sales) had been used in both het stand second years b. Determine what the balance of the alowance for doubtlul 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

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