Response to the following problem:
During its first year of operations, Williams Plumbing Supply Co. had net sales of $6,500,000, wrote off $40,000 of accounts as uncollectible using the direct write-off method, and reported net income of $590,000.
Determine what the net income would have been if the allowance method had been used, and the company estimated that 1¾% of net sales would be uncollectible.