Reference no: EM132483500

Point 1: Nash begin April with accounts receivable of $49,000 and a credit balance in allowance for uncollectible accounts of $1000. They made $500,000 in credit sales (Nash begin April with accounts receivable of $49,000 and a credit balance in allowance for uncollectible accounts of $1000. They made $500,000 in credit sales (sales on account) during April. Collections from customers totaled $493,000. One customer friend Jones could not pay his $1200 account receivable. On April 1, he negotiated to exchange his pass to account for a $1200, 4%, three months not receivable. Historically, 1% of credit sales have proved uncollectible. During April, $375 of the old accounts receivable were written off as uncollectible.

Question 1: Nash reported net income of $56,595 for the year. What effect is that $375 charge off's have a net income for the year?

Option A. charge offs have no effect on net income.

Option B. increases net income to $56,970

Option C. Reduce is not a come to $56,220