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On December 31 , Year 1 , the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible. Loudoun uses the
On December 31 , Year 1 , the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible. Loudoun uses the allowance method. On February 15, Year 2, one of Loudoun's customers failed to pay his $1,050 account and the account was written off. On April 4, Year 2 , this customer paid Loud the $1,050 Assume that the Loudoun Corporation uses the direct write-off method. Which of the following correctly describes the effect of the write-off of the customer's account on Loudoun's financial statements
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