Solution:
Bad debt expense under allowance method = $650,000* 1.5% = $9,750
Net income under if allowance method is used = Net income reported + written off uncollectible under direct write off - Bad debt expense under allowance method
= $71,500 + $10,400 - $9,750
= $72,150
During its first year of operations, Fisher Plumbing Supply Co. had sales of $650,000, wrote off...
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