At the end of 2013, Blackhorse Productions, Inc., used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $21,350. The account had an unadjusted credit balance of $10,800 at December 31, 2013.
Required:
1. Prepare journal entries for each transactions.
a. The appropriate bad debt adjustment was recorded for the year 2013.
b. On January 31, 2014, an account receivable for $1,100 from March 2013 was determined to be uncollectible and was written off.

The journal entries for each of the transactions are:

a)                                                                 Debit                           Credit

Bad debt expense                                  $10,550

Allowance for doubtful accounts                                              $10,550

b)                                                                 Debit                           Credit

Allowance for doubtful accounts             $1,100

Accounts receivable                                                                      $1,100

Explanation:

a) There was already an existing un-adjusted balance in the allowance for doubtful accounts of $10,800, meanwhile Blackhorse has estimated the amount to be $21,350 based on aging method. Simply subtract $10,800 from the $21,350 to arrive at $10,550. The above entries apply to recognize this additional provision.

b) Subsequent to year end, there was a write-off of $1,100, this means the accounts receivable balance would be reduced by this amount; same applies to the buffer (allowance account). The entries above apply.

the answer is b. the events might happen and are based on crimes.

answer; foreign exchange transaction;