Effect of doubtful accounts on net income During its first yeat of operations, Mack's Plumbing Supoly Co. had sales of $450,000, wrote off $7,200 of accounts as uncollectible using the direct iwrite-oif method, and reported net income of $49,500. Determane what the net income would have been if the allowance method had been used and the company estimated that 246 of sales would be uncoliectible: 4 x factope TChed Mr Wod Under the difest write-olf method, Bad Debs Expense is recerded when the customer's account is determined to be warthless and wniten off. There is no adjusting entry at year end to record estirnated bad debt. Fo compote net income usung the allowance method, first conpute net income before write- off of accounts assoosted with the bad debt expense. Then determine how an amount estamated for Bad Debt Lxpense based on a percens of sales, would affect that net income