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 4,300 $ 824 11,100 30,900 0 53,000 14,000 4,700 1,200 15,000 11,000 48,200 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 Totals 11,000 45,000 860 88,211 46,000 33,000 0 7,400 1,205 8,400 6,890 $228,995 $228,995 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 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 life (years) $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. Original cost Expected salvage value Useful life (years) Sprayer Injector $ 27,000 $18,000 3,000 2,500 8 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 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-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 40 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 less a. Reconciled balance Omitted check b. Necessary adjustment c. Depreciation expense d. DepreciationSprayer Depreciation Injector e. Services revenue Unearned services revenue 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 Adjustments Adjusted Trial Balance Trial Balance Debit Credit Account Title Debit Credit Debit Credit Cash 15,800 Accounts receivable 4,300 Allowance for doubtful $ 824 accounts Merchandise inventory 11,100 Trucks | 30,900 Accum. deprec.- 0 Trucks Equipment 53,000 Accum. deprec.-Equip 14,000 Accounts payable 4,7007 Estim. warranty liability 1,200 Unearned services rev 0 Interest payable Long-term notes 15,000 payable Common stock | 11,000 Retained earnings 48,200 Dividends 11,000 Extermination services 45,000 revenue Interest revenue 860 Sales 88,211 Cost of goods sold 46,000 Deprec. expense- 0 Trucks Deprec. expense- Equip Wages expense 33,000 Interest expense Rent expense 7,400 Bad debts expense Miscellaneous 1,205 expense Repairs expense 8,400 Utilities expense 6.8901 Warranty expense of Totals 228,995 228,995 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.) View transaction list 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. Credit 6 Recorded the adjustment for unearned revenues. 7 Record the estimated warranty expense. 8 Record the adjustment for interest. Note : = journal entry has been entered Req 1 Req 2 | Req3 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 Req1 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 4,300 $ 824 11,100 30,900 0 53,000 14,000 4,700 1,200 15,000 11,000 48,200 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 Totals 11,000 45,000 860 88,211 46,000 33,000 0 7,400 1,205 8,400 6,890 $228,995 $228,995 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 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 life (years) $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. Original cost Expected salvage value Useful life (years) Sprayer Injector $ 27,000 $18,000 3,000 2,500 8 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 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-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 40 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 less a. Reconciled balance Omitted check b. Necessary adjustment c. Depreciation expense d. DepreciationSprayer Depreciation Injector e. Services revenue Unearned services revenue 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 Adjustments Adjusted Trial Balance Trial Balance Debit Credit Account Title Debit Credit Debit Credit Cash 15,800 Accounts receivable 4,300 Allowance for doubtful $ 824 accounts Merchandise inventory 11,100 Trucks | 30,900 Accum. deprec.- 0 Trucks Equipment 53,000 Accum. deprec.-Equip 14,000 Accounts payable 4,7007 Estim. warranty liability 1,200 Unearned services rev 0 Interest payable Long-term notes 15,000 payable Common stock | 11,000 Retained earnings 48,200 Dividends 11,000 Extermination services 45,000 revenue Interest revenue 860 Sales 88,211 Cost of goods sold 46,000 Deprec. expense- 0 Trucks Deprec. expense- Equip Wages expense 33,000 Interest expense Rent expense 7,400 Bad debts expense Miscellaneous 1,205 expense Repairs expense 8,400 Utilities expense 6.8901 Warranty expense of Totals 228,995 228,995 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.) View transaction list 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. Credit 6 Recorded the adjustment for unearned revenues. 7 Record the estimated warranty expense. 8 Record the adjustment for interest. Note : = journal entry has been entered Req 1 Req 2 | Req3 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 Req1 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