M8-1 Evaluating the Decision to Extend Credit [LO 8-1 Nutty Productions Inc. generated service revenue of $48,000 and income from operations of $19,000. The company estimates that, had it extended credit it would have instead generated $87,000 of service revenue, but it would have incurred $34,000 of additional expenses for wages and bad debts. 1-a. Using these estimates, calculate the amount by which Income from Operations would increase (decrease) Income from Operations by 1-b. Should the company extend credit? Yes No
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