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12 July, 14:07

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?

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  1. 12 July, 16:55
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    ending balance for allowance for bad debt = 1,800

    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.
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