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, 2021. December 31, 2021 Unadjusted Trial Balance Debit Credit Cash $ 19,000 Accounts receivable 17,100 Allowance for doubtful accounts $ 848 Merchandise inventory 14,700 Trucks 42,000 Accumulated depreciation-Trucks Equipment 51,000 Accumulated depreciation-Equipment 13,900 Accounts payable 5,500 Estimated warranty liability 1,900 Unearned services revenue 0 Interest payable 0 Long-term notes payable 25,000 Common stock 28,500 Retained earnings 53,800 Dividends 20,000 Extermination services revenue 80,000 Interest revenue 892 Sales (of merchandise) 89,826 Cost of goods sold 49,300 Depreciation expense-Trucks 0 Depreciation expense-Equipment Wages expense 0 45.000 Depreciation expense-Trucks Depreciation expense-Equipment Wages expense Interest expense Rent expense Bad debts expense Miscellaneous expense Repairs expense Utilities expense 0 0 45,000 0 19,000 0 1,266 13,000 8,800 0 $ 300,166 $ 300,166 Warranty expense Totals 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, 2021, includes the following facts. Cash balance per bank Cash balance per books Outstanding checks Deposit in transit Interest earned (on bank account) Bank service charges (miscellaneous expense) $ 16,100 19,000 2,300 2,950 72 25 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.) b. An examination of customers' accounts shows that accounts totaling $689 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 $750. c. A truck is purchased and placed in service on January 1, 2021. Its cost is being depreciated with the straight-line method using the following facts and estimates. Original cost $ 42,000 Expected salvage value $ 12,000 Useful life (years) 4 d. Two items of equipment (a sprayer and an injector) were purchased and put into service in early January 2019. They are being depreciated with the straight-line method using these facts and estimates. Original cost Sprayer $ 29,000 Injector $ 22,000 Expected salvage value $ 3,000 Useful life (years) 8 $ 3,500 5 e. On September 1, 2021, the company is paid $14,700 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. f. The company offers a warranty for the services it sells. The expected cost of providing warranty service is 2.50% of the extermination services revenue of $70,200 for 2021. No warranty expense has been recorded for 2021. All costs of servicing warranties in 2021 were properly debited to the Estimated Warranty Liability account. g. The $25,000 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, 2021. h. The ending inventory of merchandise is counted and determined to have a cost of $13,700. Bug-Off uses a perpetual inventory system. Required: 1. 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 2021. d. Depreciation expense for the two items of equipment used during year 2021. e. The adjusted 2021 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts. f. The adjusted 2021 ending balances of the Warranty Expense and the Estimated Warranty Liability accounts. g. The adjusted 2021 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 b requires two adjustments. 3. Prepare journal entries to record the adjustments entered on the six-column table. Assume Bug-Off's adjusted balance for Merchandise Inventory matches the year-end physical count. 4a. Prepare a single-step income statement for 2021. 4b. Prepare the statement of retained earnings (cash dividends during 2021 were $20,000), for 2021. 4c. Prepare a classified balance sheet for December 31, 2021. 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 2021. d. Depreciation expense for the two items of equipment used during year 2021. e. The adjusted 2021 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts. (Do not round your intermediate calculations.) f. The adjusted 2021 ending balances of the Warranty Expense and the Estimated Warranty Liability accounts. g. The adjusted 2021 ending balances of the Interest Expense and the Interest Payable accounts. a. Reconciled balance of cash a. Omitted check b. Necessary adjustment c. Depreciation expense Sprayer Injector d. Depreciation expense Extermination Unearned Services Services Revenue Revenue e. Ending balances after adjustment Show less e. Ending balances after adjustment Extermination Unearned Services Revenue Services Revenue Estimated Warranty Warranty Expense Liability f. Ending balances after adjustment Interest Interest Expense Payable g. Ending balances after adjustment < Req 1 Req 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 b requires two adjustments. (Do not round your intermediate calculations.) BUG-OFF EXTERMINATORS December 31, 2021 Unadjusted Adjustments Trial Balance Account Title Adjusted Trial Balance Debit Credit Debit Credit Debit Credit Cash $ 19,000 Accounts receivable 17,100 Allowance for doubtful accounts $ 848 Merchandise inventory 14,700 Trucks 42,000 Accumulated depreciation-Trucks 0 Equipment 51,000 Accumulated depreciation-Equipment 13,900 Accounts payable 5,500 Estimated warranty liability 1,900 Unearned services revenue 0 Unearned services revenue Interest payable Long-term notes payable 0 0 25,000 Common stock 28,500 Retained earnings 53,800 Dividends 20,000 Extermination services revenue 80,000 Interest revenue 892 Sales 89,826 Cost of goods sold 49,300 Depreciation expense-Trucks 0 Depreciation expense-Equipment 0 Wages expense 45,000 Interest expense 0 Rent expense 19,000 Bad debts expense 0 Miscellaneous expense 1,266 Repairs expense 13,000 Utilities expense 8.800 Utilities expense Warranty expense Totals 8,800 0 $ 300,166 $ 300,166