Question

Ballman Corporation uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $2,000. During the year, Ballman wrote off uncollectible receivables of $4,200. Ballman also recorded an adjusting entry for $4,000 of bad debt for the current year. What is Ballman’s year-end balance in Allowance for Bad Debts?

Answer 1

ending balance for allowance for bad debt = 1,800

Step-by-step explanation:

allowance 2,000 credit

write-off (4,200)

adjusting 4,000

ending balance 1,800

The write-off decrease the value of the allowance

The adjusting it is recognizing bad dbet, so it increase their balance.