The allowance for doubtful debts account had a balance of $2200 before bad debts of $1400 were written off and the allowance was adjusted to 10% of the accounts receivable balance of $20 000. The new amount of allowance for doubtful debts that is deducted from accounts receivable in the balance sheet is:

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The new allowance for doubtful debts is calculated as 10% of the accounts receivable balance of $20,000, which equals $2,000. This is the amount that will be deducted from accounts receivable in the balance sheet.

The Allowance for Doubtful Debts Account Had a Balance of $2200