Kennedy Company uses the balance sheet approach in estimating uncollectible accounts expense. The company prepares an adjusting entry to recognize this expense at the end of each month. During the month of July, the company wrote off a $3,500 receivable and made no recoveries of previous write-offs. Following the adjusting entry for July, the credit balance in the Allowance for Impairment was $3,000 larger than it was on July 1. What amount of uncollectible account expense was recorded for July?

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The uncollectible account expense recorded for July is $3,500. The write-off of $3,500 reduces the Allowance for Impairment, and the adjusting entry increases it by $3,000 more than the beginning balance, indicating an expense of $3,500 was recorded to achieve this net increase.

Kennedy Company Uses the Balance Sheet Approach in Estimating Uncollectible