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 $ 15,800 Cash Accounts receivable 4,300 Allowance for doubt ful accounts Merchandise inventory 824 11,100 Trucks 30,900 Accum. depreciation-Trucks Equipment Accum. depreciation-Equipment Accounts payable Estimated warranty liability 53,000 14,000 4,700 1,200 Unearned services revenue 0 Interest payable 0 Long-term notes payable Common stock Retained earnings 15,000 11,000 48,200 Dividends 11,000 Extermination services revenue 45,000 Interest revenue 860 Sales (of merchandise) Cost of goods sold Depreciation expense-Trucks Depreciation expense-Equipment 88,211 46,000 0 0 33,000 Wages expense Interest expense Rent expense Bad debts expense Miscellaneous expense Repairs expense Utilities expense 7,400 0 1,205 8,400 6,890 Warranty expense 0 $228,995 $228,995 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, 2018, includes the following facts. Cash balance per bank Cash balance per books Outstanding checks $15,100 17,000 1,800 2,450 Deposit in transit Interest earned (on bank account) Bank service charges (miscellaneous 52 15 expense) 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 $32,000 Original cost Expected salvage 8,000 value Useful life (years) 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. Sprayer Injector $27,000 $18,000 Original cost Expected salvage value Useful life (years) 3,000 2,500 8 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 $42,760 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 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. 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 lessA a. Reconciled balance Omitted check b. Necessary adjustment c. Depreciation expense d. Depreciation-Sprayer Depreciation-Injector e. Services revenue Unearned services revenue f.Warranty expense Estimated warranty liability g. Interest expense Interest payable 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 Adjusted Trial Balance Debit Adjustments Credit Credit Account Title Debit Credit Debit $ 15,800 4,300 Cash Accounts receivable Allowance for doubtful $824 accounts Merchandise inventory 11,100 30,900 Trucks Accum. deprec.- Trucks Equipment Accum. deprec.-Equip Accounts payable Estim. warranty liability Unearned services rev 0 53,000 14,000 4,700 1,200 Interest payable Long-term notes ayable 00 15,000 Common stock 11,000 Retained earnings 48,200 Dividends 11,000 Extermination services 45,000 revenue 860 Interest revenue Sales 88,211 46,000 Cost of goods sold Deprec. expense Trucks Deprec. expense Equip Wages expense Interest expense Rent expense Bad debts expense 33,000 0 7,400 0 Miscellaneous 1,205 expense Repairs expense Utilities expense Warranty expense 8,400 6,890 0 $ 228,995 228,995 Totals Req 1 Req 2 Req 3 Req 4A Req 4B Req 4C Prepare journal entries to record the adjustments entered in 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.) Show lessA View transaction list Journal entry worksheet 4 5 6 78 1 2 Record the adjustment to the Cash account. Note: Enter debits before credits. Transaction (a) General Journal Debit Credit Record entry Clear entry View general journal Req 2 Req 4A> Req 1 Req 2 Req 3 Req 4A Req 4B Req 4C Prepare a single-step income statement for year 2018 BUG-OFF EXTERMINATORS Income Statement For Year Ended December 31, 2018 Revenues Total revenues Expenses Interest expense Total expenses Req 1 Req 2 Req 3 Req 4A 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 Retained earnings, December 31 2018 Req 1 Req 2 Req 3 Req 4A Req 4B Req 4C Prepare a classified balance sheet as at 2018. (Negative amounts should be indicated by a minus sign. Do not round your intermediate calculations.) BUG-OFF EXTERMINATORS Balance Sheet December 31, 2018 Assets Current assets: Total current assets Plant assets: Total plant assets Total assets Liabilities Current liabilities: Total current liabilities Long-term liabilities: Total liabilities Equity Total liabilities and equity 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 $ 15,800 Cash Accounts receivable 4,300 Allowance for doubt ful accounts Merchandise inventory 824 11,100 Trucks 30,900 Accum. depreciation-Trucks Equipment Accum. depreciation-Equipment Accounts payable Estimated warranty liability 53,000 14,000 4,700 1,200 Unearned services revenue 0 Interest payable 0 Long-term notes payable Common stock Retained earnings 15,000 11,000 48,200 Dividends 11,000 Extermination services revenue 45,000 Interest revenue 860 Sales (of merchandise) Cost of goods sold Depreciation expense-Trucks Depreciation expense-Equipment 88,211 46,000 0 0 33,000 Wages expense Interest expense Rent expense Bad debts expense Miscellaneous expense Repairs expense Utilities expense 7,400 0 1,205 8,400 6,890 Warranty expense 0 $228,995 $228,995 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, 2018, includes the following facts. Cash balance per bank Cash balance per books Outstanding checks $15,100 17,000 1,800 2,450 Deposit in transit Interest earned (on bank account) Bank service charges (miscellaneous 52 15 expense) 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 $32,000 Original cost Expected salvage 8,000 value Useful life (years) 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. Sprayer Injector $27,000 $18,000 Original cost Expected salvage value Useful life (years) 3,000 2,500 8 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 $42,760 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 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. 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 lessA a. Reconciled balance Omitted check b. Necessary adjustment c. Depreciation expense d. Depreciation-Sprayer Depreciation-Injector e. Services revenue Unearned services revenue f.Warranty expense Estimated warranty liability g. Interest expense Interest payable 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 Adjusted Trial Balance Debit Adjustments Credit Credit Account Title Debit Credit Debit $ 15,800 4,300 Cash Accounts receivable Allowance for doubtful $824 accounts Merchandise inventory 11,100 30,900 Trucks Accum. deprec.- Trucks Equipment Accum. deprec.-Equip Accounts payable Estim. warranty liability Unearned services rev 0 53,000 14,000 4,700 1,200 Interest payable Long-term notes ayable 00 15,000 Common stock 11,000 Retained earnings 48,200 Dividends 11,000 Extermination services 45,000 revenue 860 Interest revenue Sales 88,211 46,000 Cost of goods sold Deprec. expense Trucks Deprec. expense Equip Wages expense Interest expense Rent expense Bad debts expense 33,000 0 7,400 0 Miscellaneous 1,205 expense Repairs expense Utilities expense Warranty expense 8,400 6,890 0 $ 228,995 228,995 Totals Req 1 Req 2 Req 3 Req 4A Req 4B Req 4C Prepare journal entries to record the adjustments entered in 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.) Show lessA View transaction list Journal entry worksheet 4 5 6 78 1 2 Record the adjustment to the Cash account. Note: Enter debits before credits. Transaction (a) General Journal Debit Credit Record entry Clear entry View general journal Req 2 Req 4A> Req 1 Req 2 Req 3 Req 4A Req 4B Req 4C Prepare a single-step income statement for year 2018 BUG-OFF EXTERMINATORS Income Statement For Year Ended December 31, 2018 Revenues Total revenues Expenses Interest expense Total expenses Req 1 Req 2 Req 3 Req 4A 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 Retained earnings, December 31 2018 Req 1 Req 2 Req 3 Req 4A Req 4B Req 4C Prepare a classified balance sheet as at 2018. (Negative amounts should be indicated by a minus sign. Do not round your intermediate calculations.) BUG-OFF EXTERMINATORS Balance Sheet December 31, 2018 Assets Current assets: Total current assets Plant assets: Total plant assets Total assets Liabilities Current liabilities: Total current liabilities Long-term liabilities: Total liabilities Equity Total liabilities and equity