During its first year of operations, macks plumbing supply co.had sales of 3,250,000 wrote off 27,800 of accounts asuncollectible using the direct write-off method, and reported netincome of 487,500. Assume that during the second year of operationsmack plumbing supply co. had sales of 4,100,000 wrote off 34,000 ofaccounts as uncollectible using the direct write off method, andreported net income of 600,000
A. determine what net income would have been in the second yearif the allowance method (using 1% of sales) had been used in boththe first and second years
B. determine what the balance of the allowance for doubtfulaccounts would have been at the end of the second year if theallowance method had been used in both the first and secondyears
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