Effect of Doubtful Accounts on Net Income

During its first year of operations, Mack's Plumbing Supply Co. had sales of $430,000, wrote off $6,900 of accounts as uncollectible using thedirect write-off method, and reported net income of $47,300. Determine what the net income would have been if theallowance methodhad been used, and the company estimated that 1-3/4% of sales would be uncollectible.