During its first year of operations, Master Plumbing Supply Co. had sales of $550,000, wrote off $8,800
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Question:
During its first year of operations, Master Plumbing Supply Co. had sales of $550,000, wrote off $8,800 of accounts as uncollectible using thedirect write-off method, and reported net income of $60,500. Determine what the net income would have been if theallowance methodhad been used, and the company estimated that 1 1/4% of sales would be uncollectible.
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