Under the balance sheet approach, bad debts expense is $1,000 if the estimated amount of uncollectible accounts is $1,200 and the Allowance for Doubtful Accounts has a credit balance of $200.

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Under the balance sheet approach, the bad debts expense is adjusted to ensure the Allowance for Doubtful Accounts reflects the estimated uncollectible accounts. If the estimated uncollectibles are $1,200 and there's already a $200 credit balance, an additional $1,000 is needed to adjust the allowance to the correct level.

Under the Balance Sheet Approach, Bad Debts Expense Is $1,000