Bug-Off Exterminators provides pest control services and sells extermination products manufactured by other companies. The following six-column table contains the company's unadjusted trial balance as of December 31, 2018 BUG-OFF EXTERMINATORS December 31, 2018 Unadjusted Trial Balance Cash ok Accounts receivable $ 18,200 3,800 nt ence Allowance for doubtful accounts Merchandise inventory Trucks Accum. depreciation-Trucks Equipment Accum. depreciation-Equipment Accounts payable Estimated warranty liability Unearned services revenue Interest payable $ 822 12,100 30,700 0 52,000 11,200 4,000 1,300 0 e Long-term notes payable 14,600 Common stock 11,000 Retained earnings 49,200 Dividends 12,000 Extermination services revenue 56,000 Interest revenue 870 Sales (of merchandise) 79,415 Cost of goods sold 44,200 Depreciation expense-Trucks Depreciation expense- Equipment e Wages expense 33,000 Interest expense e Rent expense 7,800 Bad debts expense Miscellaneous expense 1,207 Repairs expense 6,500 Utilities expense 6,900 Warranty expense Totals $228,407 $228,407 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. 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 52 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 $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 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 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 52 15 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 $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 $32,000 Expected salvage value Useful life (years) 8,000 4 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 8 2,500 5 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 $53,760 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. 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 Uneamed 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 tem b requires two adjustments) 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 b requires 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-b. Prepare a statement of retained earnings (cash dividends during 2018 were $10,000) for year 2018. 4-c. Prepare a classified balance sheet as at 2018. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 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 1 Complete this question by entering your answers in the tabs below. 50 point Req 1 Req 2 Req 31 Req 4A Req 48 Reg 4C ellook Print D Reference 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.) BUG-OFF EXTERMINATORS December 31, 2018 Unadjusted Trial Balance Adjustments Debit Credit Debit Credit Adjusted Trial Balance Debit Credit Show less A Account Title $ Cash 18.200 Accounts receivable 3.800 Allowance for doubtful $ 822 accounts Merchandise inventory 12.100 Trucks 30.700 Accum, depree- Trucks 0 Equipment 52.000 Accum, deprec-Equip 11.200 Accounts payable 4,000 Estim wamanty habity 1.300 Uneamed services rev 0 Interest payable 0 Long-term notes 14,600 payable Common stock 11,000 Retained eamings 49.200 Dividends 12,000 Extermination services 56,000 evenue Interest revenue Sales 670 79,415 Cost of goods sold 44.200 Deprec, expense- 0 Trucks Deprec, expense- 0 Equip Wages expense 33,000 Interest expense o Rent expense 7.800 Bad debes expense Miscellaneous 1207 expense Repairs expense 6.500 Utities expense Warranty expense 6,900 0 Total 228 407 228 407