Brickman 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 $1,000. During the year Brickman wrote off uncollectible receivables of $2,100. Brickman recorded the Bad Debts Expense of $2,700. What is Brickman’s year-end balance in Allowance for Bad Debts?$1,600 $4,800$3,700 $600

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Asked Jan 4, 2020
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Brickman 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 $1,000. During the year Brickman wrote off uncollectible receivables of $2,100. Brickman recorded the Bad Debts Expense of $2,700. What is Brickman’s year-end balance in Allowance for Bad Debts?

  • $1,600 
  • $4,800
  • $3,700 
  • $600
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Expert Answer

Step 1

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for doubtful account.

 

Step 2

Calculate  Brickman’s year-end balance in Al...

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