BUG-OFF EXTERMINATORS December 31, 2018 Unadjusted Trial Balance $ 17,500 4,400 $ 806 10,500 31,600 53,000 13,000 5,000 1,400 16,000 12,000 48,100 Cash Accounts receivable Allowance for doubtful accounts Merchandise inventory Trucks Accum. depreciation-Trucks Equipment Accum. depreciation-Equipment Accounts payable Estimated warranty liability Unearned services revenue Interest payable Long-term notes payable Common stock Retained earnings Dividends Extermination services revenue Interest revenue Sales (of merchandise) Cost of goods sold Depreciation expense-Trucks Depreciation expense-Equipment Wages expense Interest expense Rent expense Bad debts expense Miscellaneous expense Repairs expense Utilities expense Warranty expense Totals 11,000 54,000 872 81,178 45,900 34,000 8,900 0 1,216 7,500 6,840 $ 232,356 $232,356 TUELLT 2 Help Save & EXIT Submit Check my work The following Information in a through h applies to the company at the end of the current year. a. The bank reconciliation as of December 31, 2018, includes the following facts. points Cash balance per bank Cash balance per books Outstanding checks Deposit in transit Interest earned (on bank account) Bank service charges (miscellaneous expense) $ 15,100 17,000 1,800 2,450 8 01:19:40 52 15 eBook Print 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.) References b. An examination of customers' accounts shows that accounts totaling $679 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 $700. c. A truck is purchased and placed in service on January 1, 2018. Its cost is being depreciated with the straight-line method using the following facts and estimates. Original cost Expected salvage value Useful life (years) $32,000 8,000 4 Check my work d. Two items of equipment (a sprayer and an injector) were purchased and put into service in early January 2016. They are being depreciated with the straight-line method using these facts and estimates. Original cost Expected salvage value Useful life (years) Sprayer Injector $27,000 $18,000 3,000 2,500 e. On August 1, 2018, the company is paid $3,840 cash in advance to provide monthly service for an apartment complex for one year. The company began providing the services in August. When the cash was received, the full amount was credited to the Extermination Services Revenue account. f. The company offers a warranty for the services it sells. The expected cost of providing warranty service is 2.5% of the extermination services revenue of $51,760 for 2018. No warranty expense has been recorded for 2018. All costs of servicing warranties in 2018 were properly debited to the Estimated Warranty Liability account. g. The $15,000 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, 2018. h. The ending inventory of merchandise is counted and determined to have a cost of $11,700. Bug-Off uses a perpetual inventory system. Check my Work Required: 1. Use the preceding information to determine amounts for the following items. a. Correct (reconciled) ending balance of Cash, and the amount of the omitted check. b. Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful Accounts. c. Depreciation expense for the truck used during year 2018. d. Depreciation expense for the two items of equipment used during year 2018. e. The adjusted 2018 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts. f. The adjusted 2018 ending balances of the Warranty Expense and the Estimated Warranty Liability accounts. g. The adjusted 2018 ending balances of the Interest Expense and the Interest Payable accounts. 2. Use the results of part 1 to complete the six-column table by first entering the appropriate adjustments for items a through g and then completing the Adjusted Trial Balance columns. (Hint: Item brequires two adjustments.) 3. Prepare journal entries to record the adjustments entered 4n the six-column table. Assume Bug-Off's adjusted balance for Merchandise Inventory matches the year-end physical count. 4-a. Prepare a single-step income statement for year 2018. 4-c. Prepare a classified balance sheet as at 2018. Comnlete this question hy entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Req 4A Req 4B Req 4C a. Correct (reconciled) ending balance of Cash, and the amount of the omitted check. b. Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful Accounts. c. Depreciation expense for the truck used during year 2018. d. Depreciation expense for the two items of equipment used during year 2018. e. The adjusted 2018 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts. f. The adjusted 2018 ending balances of the Warranty Expense and the Estimated Warranty Liability accounts. g. The adjusted 2018 ending balances of the Interest Expense and the Interest Payable accounts. (Round amounts to nearest whole dollar.) Show less a. Reconciled balance Omitted check b. Necessary adjustment C. Depreciation expense d. DepreciationSprayer DepreciationInjector e. Services revenue Unearned services revenue f. Warranty expense Estimated warranty liability Interest expense Interest payable $ $ $ $ $ $ $ $ $ $ 15,750 1,287 566 6,000 3,000 3,100 39,760 2,240 1,094 2,394 0