Answer:
Allegheny should report as $2,200 as Uncollectible Accounts Expense on its 2016 income statement.
Explanation:
Allegheny determines its bad debt expense by aging its receivables.
The write-off during 2016 would have this effect:
Debit Allowance for doubtful accounts $1,500
Credit Accounts receivable $1,500
<em>(To record write-off during 2016)</em>
The balance in the allowance for doubtful accounts would be $900 - $1,500 = $600 Debit
To reinstate the Allowance account to the estimated amount of $1,600, we need to add back the debit balance to arrive at $1,600 + $600 = $2,200.
The net realizable value of the Accounts receivable becomes: $23,000 - $1,500 - $1,600 = $19,900
