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, 2013.

BUG-OFF EXTERMINATORS
December 31, 2013
	Unadjusted Trial Balance
Cash	$	17,500
Accounts receivable		4,800
Allowance for doubtful accounts				$	816
Merchandise inventory		13,100
Trucks		31,520
Accum. depreciation?Trucks					0
Equipment		47,830
Accum. depreciation?Equipment					12,700
Accounts payable					5,800
Estimated warranty liability					1,230
Unearned services revenue					0
Interest payable					0
Long-term notes payable					13,300
D. Buggs, Capital					70,329
D. Buggs, Withdrawals		11,200
Extermination services revenue					58,230
Interest revenue					858
Sales (of merchandise)					71,126
Cost of goods sold		46,500
Depreciation expense?Trucks		0
Depreciation expense?Equipment		0
Wages expense		36,400
Interest expense		0
Rent expense		10,000
Bad debts expense		0
Miscellaneous expense		1,239
Repairs expense		8,100
Utilities expense		6,200
Warranty expense		0
Totals	$	234,389		$	234,389

The following information inathroughhapplies to the company at the end of the current year.

a.	The bank reconciliation as of December 31, 2013, includes the following facts.

Cash balance per bank	$	13,900
Cash balance per books		17,500
Outstanding checks		1,840
Deposit in transit		2,370
Interest earned (on bank account)		45
Bank service charges (miscellaneous expense)		18

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 $678 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 $713.

c.	A truck is purchased and placed in service on January 1, 2013. Its cost is being depreciated with the straight-line method using the following facts and estimates.

Original cost	$	31,520
Expected salvage value		6,800
Useful life (years)		4

d.	Two items of equipment (a sprayer and an injector) were purchased and put into service in early January 2011. They are being depreciated with the straight-line method using these facts and estimates.

		Sprayer			Injector
Original cost	$	29,880		$	17,950
Expected salvage value		5,000			2,200
Useful life (years)		8			5

e.	On August 1, 2013, the company is paid $3,720 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 1.5% of the extermination services revenue of $56,060 for 2013. No warranty expense has been recorded for 2013. All costs of servicing warranties in 2013 were properly debited to the Estimated Warranty Liability account.

g.	The $13,300 long-term note is an 10%, 5-year, interest-bearing note with interest payable annually on December 31. The note was signed with First National Bank on December 31, 2013.

h.	The ending inventory of merchandise is counted and determined to have a cost of $13,100. 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 2013.

d.	Depreciation expense for the two items of equipment used during year 2013.

e.	The adjusted 2013 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts.(Do not round your intermediate calculations.)

f.	The adjusted 2013 ending balances of the accounts for Warranty Expense and Estimated Warranty Liability.

g.	The adjusted 2013 ending balances of the accounts for Interest Expense and Interest Payable.

2.	Use the results of part 1 to complete the six-column table by first entering the appropriate adjustments for itemsathroughgand then completing the adjusted trial balance columns. (Hint: Itembrequires two adjustments.)(Do not round your intermediate calculations.)

*****See attachment for the six column table ****

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.(If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Do not round your intermediate calculations.)

• 1. Record the adjustment to the Cash account.
• 2. Record the write off of uncollectible accounts.
• 3. Record the adjustment for bad debts.
• 4. Record depreciation on the truck.
• 5. Record depreciation on the equipment.
• 6. Recorded the adjustment for unearned revenues.
• 7. Record the estimated warranty expense.
• 8.Recordtheadjustmentforinterest.

4.1	Prepare a single-step income statement for year 2013.

***See attachment for income statement****

4.2	Prepare a statement of owner's equity (cash withdrawals during 2013 were $11,200) for year 2013 and there were no investments by the owner in the current year.

**** See attachemnt for owners equity****

4.3	Prepare a Classified balance sheet as at 2013.(Negative amounts should be indicated by a minus sign. Do not round your intermediate calculations.)

**** See attachment for classified balance sheet****

e) Ending Balance after adjustment Service Revenue Unearned Service Revenue 56060 2170 f) Ending Balance after adjustment Warranty Expenses Estimated Warranty Liability 841 2071 4.3) Please put (-) sign against -713 -6180 -18960 e) Ending Balance after adjustment Service Revenue Unearned Service Revenue 56060 2170 f) Ending Balance after adjustment Warranty Expenses Estimated Warranty Liability 841 2071 4.3) Please put (-) sign against -713 -6180 -18960