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-OPE EXTERMINATORS December 31, 2018 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 Total Unadjusted Trial Balance $ 17,300 3,300 $ 842 11,600 33, 100 0 41,000 12,100 5,900 1,500 0 0 14,600 11,000 49,800 13,000 68,000 858 55,129 44,500 0 0 34,000 0 7,900 0 1,209 6.100 5,720 0 $219, 729 $219, 729 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. book Cash balance per bank Cash balance per books Outstanding checks Deposit in transit Interent earned (on bank account) Bank service charges (miscellaneous expense) $ 15,100 17,000 1,800 2,450 52 25 conces 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 Expected salvage value Useful to year) $32,000 8,000 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 Checkt Original cost Expected salvage value Useful life (years) Sprayer Injector $27,000 $18,000 3,000 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 $65,760 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 $11700. 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 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 An the six-column table. Assume Bug-Off's adjusted balance for 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, 4-6. 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. Reg 1 Reg 2 Reg 3 Req 4A Req 46 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. The adjusted 2018 ending balances of the Warranty Expense and the Estimated Warranty Liability accounts. 9. The adjusted 2018 ending balances of the Interest Expense and the Interest Payable accounts. (Round amounts to nearest whole dollar Show less $ 15,750 a. Reconciled balance Omitted check $ 1,287 10 Saved Adjusted Trial Balance Debit Credit December 31, 2018 Unadjusted Trial Balance Adjustments Debit Credit Debit Credit $ 17,300 3,300 $ 842 11,600 33,100 0 41,000 12,100 5,900 1,500 Account Title Cash Accounts receivable Allowance for doubtful accounts Merchandise inventory Trucks Accum. deprec.-Trucks Equipment Accum. deprec.-Equip Accounts payable Estim. warranty liability Unearned services rev Interest payable Long-term notes payable Common stock Retained earnings Dividends Extermination services revenue Interest revenue Sales Cost of goods sold Deprec. expense--Trucks Deprec. expense-Equip 0 0 14,600 11,000 49,800 13,000 68,000 858 55,129 44,500 0 0 Income Statement For Year Ended December 31, 2018 Revenues Extermination services revenue $ 65,760 Sales 55,129 Interest revenue 910 $ 121,799 Total revenues Expenses Cost of goods sold Depreciation expense-Trucks Depreciation expense-Equipment Wages expense 44,500 6,000 6,100 34,000 7,900 537 Rent expense Bad debts expense Miscellaneous expenses Repairs expense Utilities expense Warranty expense 1,241 6,100 6,720 1,644 0 Interest expense Total expenses Net income 114,742 $ 7,057 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. Reg 1 Reg 2 Reg 3 Req 4A CE Req 4B Req 4C Prepare a statement of retained earnings (cash dividends during 2018 were $10,000) for year 2018. BUG-OFF EXTERMINATORS Statement of Retained Earnings For Year Ended December 31, 2018 Retained earnings, December 31, 2017 0 Retained earnings, December 31, 2018 $ 0 BUG-OFF EXTERMINATORS Balance Sheet December 31, 2018 Assets Current assets: Accounts payable Estimated warranty liability Unearned services revenue es 0 Total current assets 0 Plant assets: Trucks 0 Accum. depreciation-Trucks Trucks, net Equipment Accum. depreciation-Equipment Equipment, net Total plant assets Total assets Liabilities Current liabilities: 0 0 $ 0 Common stock Retained earninne Accum. depreciation Equipment Equipment, net Total plant assets 0 0 Total assets $ 0 Liabilities Current liabilities: Common stock Retained earnings Total current liabilities $ 0 Long-term liabilities: Total liabilities 0 Equity Total liabilities and equity $ $ 0