On October 29 of the current year, a company concluded that a customer's $4,400 account receivable was uncollectible and that the account should be written off. What effect will this write-off have on this company's net income and total assets assuming the allowance method is used to account for bad debts?
1. decrease in net income; no effect on total assets.
2. no effect on net income; no effect on total assets.
3. decrease in net income; decrease in total assets.
4. increase in net income; no effect on total assets.