Under the balance sheet approach, bad debts expense is $1,500 if the estimated amount of uncollectible accounts is $1,000 and the Allowance for Doubtful Accounts has a debit balance of $500.

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The balance sheet approach focuses on adjusting the Allowance for Doubtful Accounts to the desired balance. If the desired balance is $1,000 and there's already a $500 debit balance (indicating previous overestimation of recoveries), you need to increase the allowance by $1,500 ($1,000 desired minus -$500 existing debit balance) to reach the correct estimated amount of uncollectible accounts. This adjustment is recorded as Bad Debts Expense.

Under the Balance Sheet Approach, Bad Debts Expense Is $1,500