STEP 4: WORKSHEET AND TRIAL BALANCE

LESSON 14-2 2

RECORDING A TRIAL BALANCE ON A WORK SHEET

page 410

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21. Account title

2. Account balance

3. Total, prove, and rule the debit and credit columns

ASSIGNMENT

• Page 414 • 14-2 On your own and work together.

ADJUSTMENTS

LESSON 14-3 5

MERCHANDISE INVENTORY page 415

LESSON 14-3 6

ANALYZING AND RECORDING A MERCHANDISE INVENTORY ADJUSTMENT

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page 416

1. Write the debit amount.

3. Label the two parts of this adjustment with a small letter d in parentheses.

2. Write the credit amount.

LESSON 14-3 7

ANALYZING AN ADJUSTMENT WHEN ENDING MERCHANDISE INVENTORY IS GREATER THAN BEGINNING

MERCHANDISE INVENTORYpage 417

Jan. 1 Bal. 294,700.00

Adj. (d) 4,200.00

(New Bal. 298,900.00)

Merchandise Inventory

Adj. (d) 4,200.00

Income Summary

ASSIGNMENTS

• Page 418 – Work Together and On Your Own 14-3

LESSON 14-4 9

ALLOWANCE METHOD OF RECORDING LOSSES FROM UNCOLLECTIBLE ACCOUNTS page 419

10

LESSON 14-4

EstimatedUncollectible

Accounts Expense=Percentage×

Total Saleson Account

$1,245.00=1%×$124,500.00

ESTIMATING UNCOLLECTIBLE ACCOUNTS EXPENSE page 420

LESSON 14-4 11

1. Enter the estimated uncollectible amount.

ANALYZING AND RECORDING AN ADJUSTMENT FOR UNCOLLECTIBLE ACCOUNTS EXPENSE

3. Label the two parts with a small letter e in parentheses.

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page 421

2. Enter the same amount in the Adjustments Debit column.

ASSIGNMENTS

• Page 422 On your Own and Work Together 14-4

LESSON 14-5 13

CALCULATING DEPRECIATION EXPENSE AND BOOK VALUE

Estimated TotalDepreciation

Expense=

EstimatedSalvage Value

–Original

Cost

$1,000.00=$250.00–$1,250.00

AnnualDepreciation

Expense=

Years ofEstimatedUseful Life

÷Estimated Total

DepreciationExpense

$200.00=5÷$1,000.00

1. Subtract the asset’s estimated salvage value from original cost.

2. Divide the estimated total depreciation expense by the years of estimated useful life.

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LESSON 14-5 14

CALCULATING DEPRECIATION EXPENSE AND BOOK VALUE page 424

20X3AccumulatedDepreciation

=20X3

DepreciationExpense

+20X2

AccumulatedDepreciation

$600.00=$200.00+$400.00

EndingBook Value

=AccumulatedDepreciation

–Original Cost

$650.00=$600.00–$1,250.00

(continued from previous slide)

LESSON 14-5 15

ANALYZING AND RECORDING ADJUSTMENTS FOR DEPRECIATION EXPENSE page 425

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3

1. Write the debit amounts.

2. Write the credit amounts.

3. Label the adjustments.

ASSIGNMENT

• Review Pages 423 -426• Complete Page 426 – ALL

SUMMARY ASSIGNMENT

• Page 439 14-7