Reference no: EM133138801

Question - The Wallace Corporation started Year Four with $500,000 in its accounts receivable T-account and an allowance for doubtful accounts of $20,000 (credit balance). During that year, the company made additional sales of $1.6 million while collecting cash of $1.3 million. In addition, $24,000 in accounts were written off as uncollectible. Company officials for Wallace estimated that 4 percent of ending receivables would eventually prove to be uncollectible based on past history and current economic conditions. The adjusting entry was prepared and preliminary financial statements were created. These statements showed net income of $220,000 and a total for all reported assets of $1.1 million. At the last moment, on December 31, Year Four, company officials discovered another receivable of $1,000 that needed to be written off because the debtor went bankrupt and was liquidated. What should the company report as its net income for the year and as its total for all reported assets as of the end of that year?