ACCOUNTING SYSTEM PRACTICE Pest Service INSTRUCTIONS-Pest Service sprays chemicals to kill bugs: ants, termites, fleas, etc. Use the instructions below to complete its books. Forms follow. 1. Account Names: Cash, Prepaid Insurance, Chemical Supplies, Equipment, Accumulated Depreciation, Accounts Payable, Unearned Revenue, Note Payable, Common Stock Retained Earnings, Dividends, Service Revenue, Utility Expense, Depreciation Expense, Chemical Expense, Insurance Expense, Tax Expense. 2. A Chart of Accounts needs to be stated using Account Names in (1) above. 3. Prepare journal entries to record transactions described below and December adjustments Include descriptions in the journal entry 4. Post December journal entries to ledger accounts 5. Prepare an adjusted trial balance from ledger accounts for the month of December. 6. From the trial balance, prepare an income statement, statement of shareholder's equity, and a balance sheet of December 31, 20x7. (No cash flow statement) 7. Do NOT prepare or post the closing entries. DECEMBER TRANSACTIONS & ADJUSTMENTS DEC 20x7 $600 deposit to Neighborly Bank (account #12345) from Jack 1 Pest Service began with a and J ill Liminator, 100 shares of no par common stock were issued to each owner 2 4 Jack wrote check #101 for S60 to HelppInsurance for 12 months of coverage Jill purchased sprayer equipment for $200 by issuing check #102 for a $20 down pay- ment and signing a non-interest note payable to Mist Machines at $10 per month for 18 months, starting January 1. The equipment will operate 40 months before replacement. Jill signed purchase order #001 for supplies and emailed a copy to Ogre Chemicals, the chemicals were listed at $50 plus sales taxes of $3 5 Jack received $75 from Sanitary Kitchens as advance payment for Pest spraying service. The cash was deposited into Neighborly Bank account #12345 Jill received chemicals and a $42 invoice #991 from Ogre: the bill is to be paid in 30 days. Ogre attached a note stating the other chemicals would be delivered in January 8 12 30 Jill received a bill (account 7886) from SunGenerator for utilities used in December, $15 31 Jack deposited $80 into Neighborly Bank for pest service rendered in December 31 Jack calculated that two-thirds of the Sanitary Kitchens contract was completed. 31 Jill counted the inventory of unused chemicals on hand as $5 at the end of December 31 Jack issued check #102 for $25 to Ogre for chemical supplies. 31 Jill received a Thank You card from Helpp Insurance, including a reminder that only 11 months remained on its policy 31 Mish Machines worked well during its first month. It might last 39 more months. ill estimates income taxes are $30 for December. Tax payments will be made quarterly, starting at the end of February, 20x7