4.3 Work Sheet. Uncollectable Accounts Expense Adjustment Uncollectable accounts Expense –NB = Dr. –% of sales on account Allow. For Uncoll. Accts. –Contra.

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Presentation transcript:

4.3 Work Sheet

Uncollectable Accounts Expense Adjustment Uncollectable accounts Expense –NB = Dr. –% of sales on account Allow. For Uncoll. Accts. –Contra asset account for A/R –Normal balance = Cr. –A/R is NOT decreased for Uncollectable Accounts Adjustment Dr. Uncoll. Accts. Exp. Cr. Allow For Uncoll. Accts. Why do we have to journalize uncollectable accounts before they are determined to be uncollectable? Matching Expenses with Revenue

Depreciation Expense Adjustment Plant assets decrease in value, which is considered an expense to the business Accumulated Depreciation—Office Equipment –Office Equipment is not decreased because of depreciation, only when it is sold. –Contra asset account to Office Equipment –NB = Cr. Depreciation Expense-Office Equipment –NB = Dr. Adjustment Dr. Depreciation Expense-Office Equipment Cr. Accumulated Depreciation—Office Equipment Why do we have to journalize depreciation? How does a corporation benefit from recording this expense?

Federal Income Tax Ajustment Corporations pay federal income taxes quarterly (based on an estimate) Once year is over, they calculate actual federal income tax owed and pay the difference. Adjustment: –Dr. Federal Income Tax Expense –Cr. Federal Income Tax Payable Could this Adjustment be reversed?