Abc company uses the allowance method to account for uncollectible accounts receivable. at the beginning of the year, the allowance for bad debts account had a credit balance of $1,000. during the year, abc co, wrote off $2,100 in bad debts, and recorded bad debt expense of $2,700. what is the year end balance in the allowance account?

Balance in the Allowance Account : $1600

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Explanation:

When the company determined the bad debt balance, the company made the next entry to the accounting system.

Debit - Bad Debts Expense$1000  

Credit - Allowance for Doubtful Accounts  $1000

When the company write-off some debts it makes the next entry.

Debit - Allowance for Doubtful Debts$2.100

Credit - Accounts Receivable  $2.100

When the company recorded bad debt expenses:

Debit - Bad Debts Expense$2700  

Credit - Allowance for Doubtful Accounts  $2700

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