The company in this illustration expects to collect an amount from its receivables that will notmaterially differ from $93,000. The related $7,000 expense is recorded in the same period as therevenue through an adjusting entry. What happens when an actual account is determined to beuncollectible? For example, assume that on March 13, Year Two, a $1,000 balance proves to beworthless. The customer dies, declares bankruptcy, disappears, or just refuses to make payment. This isnot a new expense; $7,000 was already anticipated and recognized in Year One. It is merely the first discovery. How does the subsequent write-off of a receivable as being uncollectible affect the various Taccountbalances?