Bug$-$Off Exterminators provides pest control services and sells extermination products manufactured by other companies. Following is the company's unadjusted trial balance as of December $31,2026.$

December $31,2026$

Unadjusted Trial Balance

Debit Credit

Cash $ $17,800$

Accounts receivable $3,480$

Allowance for doubtful accounts $ $836$

Merchandise inventory $12,900$

Trucks $36,000$

Accumulated depreciation$$Trucks $0$

Equipment $47,400$

Accumulated depreciation$$Equipment $12,880$

Accounts payable $5,200$

Estimated warranty liability $1,600$

Unearned services revenue $0$

Interest payable $0$

Long$-$term notes payable $19,000$

Common stock $28,000$

Retained earnings $40,500$

Dividends $14,000$

Extermination services revenue $68,000$

Interest revenue $880$

Sales $($of merchandise$)73,026$

Cost of goods sold $47,500$

Depreciation expense$$Trucks $0$

Depreciation expense$$Equipment $0$

Wages expense $39,000$

Interest expense $0$

Rent expense $13,000$

Bad debts expense $0$

Miscellaneous expense $1,242$

Repairs expense $10,000$

Utilities expense $7,600$

Warranty expense $0$

Totals $ $249,922$ $ $249,922$

The following information in a through h applies to the company at the end of the current year.

The bank reconciliation as of December $31,2026,$ includes the following facts.

Cash balance per bank $ $15,500$

Cash balance per books $17,800$

Outstanding checks $2,000$

Deposit in transit $2,650$

Interest earned $($on bank account$)60$

Bank service charges $($miscellaneous expense$)19$

Reported on the bank statement is a canceled check that the company failed to record. $($Information from the bank reconciliation allows you to determine the amount of this check, which is a payment on an account payable.$)$

An examination of customers$$ accounts shows that accounts totaling $$683$ should be written off as uncollectible. Using an aging of receivables, the company determines that the ending balance of the Allowance for Doubtful Accounts should be $$720.$

A truck is purchased and placed in service on January $1,2026.$ Its cost is being depreciated with the straight$-$line method using the following facts and estimates.

Original cost $ $36,000$

Expected salvage value $ $9,600$

Useful life $($years$)4$

Two items of equipment $($a sprayer and an injector$)$ were purchased and put into service in early January $2024.$ They are being depreciated with the straight$-$line method using these facts and estimates.

Sprayer Injector

Original cost $ $27,800$ $ $19,600$

Expected salvage value $ $3,000$ $ $2,900$

Useful life $($years$)85$

On September $1,2026,$ the company is paid $$7,500$ cash in advance to provide monthly service for an apartment complex for one year. The company began providing the services in September. When the cash was received, the full amount was credited to the Extermination Services Revenue account.

The company offers a warranty for the services it sells. The expected cost of providing warranty service is $2\mathrm{.}5\%$ of the extermination services revenue of $$63,000$ for $2026.$ No warranty expense has been recorded for $2026.$ All costs of servicing warranties in $2026$ were properly debited to the Estimated Warranty Liability account.

The $$19,000$ long$-$term note is an $8\%,$ five$-$year, interest$-$bearing note with interest payable annually on December $31.$ The note was signed with First National Bank on December $31,2026.$

The ending inventory of merchandise is counted and determined to have a cost of $$12,500.$ Bug$-$Off uses a perpetual inventory system.Complete this question by entering your answers in the tabs below.

Determine amounts for the following items:

Correct $($reconciled$)$ ending balance of Cash; and the amount of the omitted check.

Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful

Accounts.

:$.$ Depreciation expense for the truck used during year $2026.$

$.$ Depreciation expense for the two items of equipment used during year $2026.$

The adjusted $2026$ ending balances of the Extermination Services Revenue and

Unearned Services Revenue accounts.

Note: Do not round your intermediate calculations.

: The adjusted $2026$ ending balances of the Warranty Expense and the Estimated

Warranty Liability accounts.

The adjusted $2026$ ending balances of the Interest Expense and the Interest Payable

accounts.

Show less