Using the following categories, indicate the effects of the following transactions. indicate the accounts affected and the amounts. (enter any decreases to assets, liabilities, or stockholders equity with a minus sign.) during the period, customer balances are written off in the amount of $11,300. at the end of the period, bad debt expense is estimated to be $9,300.

Customer balances are written off in the amount of $11,300.  

Dr Bad Debt Expense$ 11.300

Cr Accounts receivable$ 11.300

At the end of the period, bad debt expense is estimated to be $9,300.  

Dr Bad Debt Expense$ 9.300

Cr Allowance for Uncollectible Accounts$ 9.300

Explanation:

Customer balances are written off in the amount of $11,300.  

Dr Bad Debt Expense$ 11.300

Cr Accounts receivable$ 11.300

It's assumed that the company apllied the direct method to write off customer balances.  

When the company report that customer balances are written off it means  

that the company it's reporting a loss the income statement and less assets.  

Dr Bad Debt Expense it's a loss account of the income statement, a debit to this account means a loss to the company.  

The contra account it's the asset account "account receivable" that will have a negative impact becasue of the writte off.  

At the end of the period, bad debt expense is estimated to be $9,300.  

Dr Bad Debt Expense$ 9.300

Cr Allowance for Uncollectible Accounts$ 9.300

In this case the company make an estimation of losses for the customer account that maybe won't be collected, this estimation it's made over balances at the end of the year that impact in the current income statement.

The impact it's the same as before with the difference that it's an estimation, less asset and more losses in the income statement.  

If the estimation are not met, the next year wont be necessary to report a new loss in the income statement, if some accounts are not collected it will be reported using the estimation balances.  

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