Journal entries to correct errors and adjust for changes in estimates. Prepare journal entries to record each of the following items for Uncertainty Corporation for 2008. Uncertainty Corporation uses a calendar war reporting period. Ignore income tax effects.

a. Discovers on January 15. 2008, that it neglected to amortize a patent during 2007 in the amount of $12,000.

b. Discovers on January 20, 2008, that it recorded the sale of a machine on December 30, 2007, for $6,000 with the following journal entry:

c. Changes the depreciable life of a building as of December 31, 2008, from a total useful Life of 30 years to a total of 42 years. The building has an acquisition cost of $2,400,000 and is 11 years old as of December 31, 2008. The firm has not recorded depreciation for 2008. It uses the straight-line method and zero estimated salvage value.
d. The firm has used 2% of sales as its estimate of uncollectible accounts for several years. Its actual losses have averaged only 1.50% of sales Consequently, the Allowance for Estimated Uncollectibles account has a credit balance of $25,000 at the end of 2008 before making the provision for 2008. An aging of customers' accounts suggests that the firm needs $35,000 in the allowance account at the end of 2008 to cover estimated uncollectibles. Sales for 2008 are$1,000,000.

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6,000 Cash... Loss on Sale of Machine Machine (acquisition cost) 4,000 10,000 Shareholders' Assets = Liabilities Equity (Class.) IncSt → RE +6,000 -4,000 -10,000 The machine had accumulated depreciation of $7,000 on the date of the sale.