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, 2021. December 31, 2021 Unadjusted Trial Balance Debit Credit Cash $ 17,600 Accounts receivable 3,610 Allowance for doubtful accounts $ 834 Merchandise inventory 12,600 Trucks 35,000 Accumulated depreciation-Trucks 0 Equipment 46,800 Accumulated depreciation-Equipment 12,710 Accounts payable 5,150 Estimated warranty liability 1,550 Unearned services revenue 0 Interest payable 0 Long-term notes payable 18,000 Common stock 26,000 Retained earnings 40,200 Dividends 13,000 Extermination services revenue 66,000 Interest revenue 878 Sales (of merchandise) 72,626 Cost of goods sold 47,200 Depreciation expense-Trucks 0 Depreciation expense-Equipment 0 Wages expense 38,000 Interest expense 0 Rent expense 12,000 Bad debts expense 0 Miscellaneous expense Repairs expense 1,238 9,500 Utilities expense Warranty expense 7,400 0 Totals $ 243,948 $ 243,948 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 2021. d. Depreciation expense for the two items of equipment used during year 2021. e. The adjusted 2021 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts. Note: Do not round your intermediate calculations. f. The adjusted 2021 ending balances of the Warranty Expense and the Estimated Warranty Liability accounts. g. The adjusted 2021 ending balances of the Interest Expense and the Interest Payable accounts. a. Reconciled balance of cash a. Omitted check b. Necessary adjustment c. Depreciation expense d. Depreciation expense $ 16,050 $ 563 Sprayer Injector Extermination Unearned Services Services Revenue Revenue e. Ending balances after adjustment Estimated Warranty Warranty Expense Liability f. Ending balances after adjustment Interest Expense Interest Payable g. Ending balances after adjustment Show less 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, 2021, 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) $ 15,400 17,600 1,950 2,600 58 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 $682 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 $715. c. A truck is purchased and placed in service on January 1, 2021. Its cost is being depreciated with the straight-line method using the following facts and estimates. Original cost $ 35,000 Expected salvage value $ 9,200 Useful life (years) 4 d. Two items of equipment (a sprayer and an injector) were purchased and put into service in early January 2019. They are being depreciated with the straight-line method using these facts and estimates. Sprayer Injector Original cost $ 27,600 $ 19,200 Expected salvage value $ 3,000 $ 2,800 Useful life (years) 8 5 e. On September 1, 2021, the company is paid $6,300 cash in advance to provide monthly service for an apartment complex for one year. The company began providing the services in September. When the cash was received, the full amount was credited to the Extermination Services Revenue account. Account Title BUG-OFF EXTERMINATORS December 31, 2021 Unadjusted Trial Balance Adjustments Adjusted Trial Balance Debit Credit Debit Credit Debit Credit Cash $ 17,600 $ 1,550 $ 16,050 Accounts receivable 3,610 682 2,928 Allowance for doubtful accounts $ 834 $ 682 563 $ 715 Merchandise inventory 12,600 12,600 Trucks 35,000 35,000 Accumulated depreciation-Trucks 0 6,450 6,450 Equipment 46,800 46,800 Accumulated depreciation- 12,710 6,355 19,065 Equipment Accounts payable 5,150 1,590 3,560 Estimated warranty liability 1,550 1,545 3,095 Unearned services revenue 0 4,200 4,200 Interest payable 0 Long-term notes payable 18,000 Common stock 26,000 Retained earnings 40,200 18,000 26,000 40,200 Dividends 13,000 13,000 Extermination services revenue 66,000 4,200 61,800 Interest revenue 878 58 936 Sales 72,626 72,626 Cost of goods sold 47,200 47,200 Depreciation expense-Trucks 0 6,450 6,450 Depreciation expense-Equipment 0 6,355 6,355 Wages expense 38,000 38,000 Interest expense 0 Rent expense 12,000 12,000 Bad debts expense 0 563 563 Miscellaneous expense 1,238 18 1,256 Repairs expense 9,500 9,500 Utilities expense 7,400 7,400 Warranty expense 0 1,545 1,545 $ $ Totals $243,948 $243,948 $21,403 $21,403 256,647 256,647 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 $61,800 for 2021. No warranty expense has been recorded for 2021. All costs of servicing warranties in 2021 were properly debited to the Estimated Warranty Liability account. g. The $18,000 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, 2021. h. The ending inventory of merchandise is counted and determined to have a cost of $12,300. Bug-Off uses a perpetual inventory system. Required: 1. 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 2021. d. Depreciation expense for the two items of equipment used during year 2021. e. The adjusted 2021 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts. f. The adjusted 2021 ending balances of the Warranty Expense and the Estimated Warranty Liability accounts. g. The adjusted 2021 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 on the six-column table. Assume Bug-Off's adjusted balance for Merchandise Inventory matches the year-end physical count. 4a. Prepare a single-step income statement for 2021. 4b. Prepare the statement of retained earnings (cash dividends during 2021 were $13,000) for 2021. 4c. Prepare a classified balance sheet for December 31, 2021. BUG-OFF EXTERMINATORS Income Statement For Year Ended December 31, 2021 Revenues Extermination services revenue Interest revenue Sales Total revenues Expenses Cost of goods sold Depreciation expense-Trucks Depreciation expense-Equipment Wages expense Rent expense Bad debts expense Miscellaneous expenses Repairs expense Utilities expense Warranty expense Total expenses [Net income $ 0 0 $ 0 BUG-OFF EXTERMINATORS Statement of Retained Earnings For Year Ended December 31, 2021 Retained earnings December 31, 2020 Add: Net income Less: Dividends Retained earnings December 31, 2021 SA $ 0 0