Effect of doubtful accounts on net income During its first year of operations, Mack's Plumbing Supply Co. had sales of $340,000, wrote off $5,400 of accounts as uncollectible using the direct write-off method, and reported net income of $37,400. Determine what the net income would have been if the allowance method had been used and the company estimated that 2% of sales would be uncollectible.