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, 2019. 0.31 points December 31, 2019 Unadjusted Trial Balance Cash $ 18,600 Accounts receivable 4,800 Allowance for doubtful accounts $ 844 Merchandise inventory 10,100 Trucks 40,000 Accum. depreciation-Trucks Equipment 60,200 Accum. depreciation Equipment 18,600 Accounts payable 5,400 Estimated warranty liability 1,800 Unearned services revenue Interest payable Long-term notes payable 19,000 D. Buggs, Capital 77,700 D. Buggs, Withdrawals 18,000 Extermination services revenue 74,975 Interest revenue 888 Sales (of merchandise) 82, 851 Cost of goods sold 48,700 Depreciation expense-Trucks Depreciation expense-Equipment Wages expense 43,000 Interest expense Rent expense 17,000 Bad debts expense Miscellaneous expense 1,258 Repairs expense 12,000 Utilities expense 8,400 Warranty expense Totals $282,058 $282.958 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, 2019, 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) $15,900 18,600 2,200 2,850 68 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 $687 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 $740. C. A truck is purchased and placed in service on January 1, 2019. Its cost is being depreciated with the straight-line method using the following facts and estimates. Original cost Expected salvage value Useful life (years) $36,000 $11,200 d. Two items of equipment (a sprayer and an injector) were purchased and put into service in early January 2017. They are being depreciated with the straight-line method using these facts and estimates. Original cost Expected salvage value Useful life (years) Sprayer Injector $33,400 $19,600 $ 3,000 $3,300 e. On September 1, 2019, the company is paid $12,300 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. f. The company offers a warranty for the services it sells. The expected cost of providing warranty service is 4% of the extermination services revenue of $66,775 for 2019. No warranty expense has been recorded for 2019. All costs of servicing warranties in 2019 were properly debited to the Estimated Warranty Liability account. g. The $19,000 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, 2019. h. The ending inventory of merchandise is counted and determined to have a cost of $10,100. 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 2019. d. Depreciation expense for the two items of equipment used during year 2019. e. The adjusted 2019 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts. f. The adjusted 2019 ending balances of the accounts for Warranty Expense and Estimated Warranty Liability. g. The adjusted 2019 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 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 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 year 2019. 4b. Prepare a statement of owner's equity (cash withdrawals during 2019 were $18,000) for year 2019 and there were no investments by the owner in the current year. 4c. Prepare a classified balance sheet as at 2019. Reg 1 Req 2 Req3 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 2019. 1. Depreciation expense for the two items of equipment used during year 2019. B. The adjusted 2019 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts. (Do not round your intermediate calculations.) f. The adjusted 2019 ending balances of the accounts for Warranty Expense and Estimated Warranty Liability, 9. The adjusted 2019 ending balances of the accounts for Interest Expense and Interest Payable. Show less Reconciled balance Omitted check Necessary adjustment Depreciation expense $ $ $ $ 16,550 2,095 583 6,200 Sprayer $ 3,800 Injector $ 3,260 Depreciation expense Services Revenue Unearned Services Revenue Ending balances after adjustment $ 66,775 $ 8,200 Warranty Expense Estimated Warranty Liability $ 4,471 Ending balances after adjustment $ 2,671 Interest Expense Interest Payable Ending balances after adjustment BUG-OFF EXTERMINATORS December 31, 2019 Unadjusted Adjustments Trial Balance Debit Credit Debit Credit $ 18,600 $ 2,050 4,800 687 $ 844 $ 687 583 10,100 40,000 6,200 60,200 18,600 7,060 5,400 2.095 1,800 2,671 0 8.200 Adjusted Trial Balance Debit Credit $ 16,550 4,113 $ 740 10,100 40,000 6,200 60,200 25,660 3,305 4,471 8,200 0 19.000 77,700 19,000 77,700 Account Title Cash Accounts receivable Allowance for doubtful accounts Merchandise inventory Trucks Accum. deprec-Trucks Equipment Accum. deprec.-Equip Accounts payable Estim. warranty liability Uneamed services rev Interest payable Long-term notes payable D. Buggs, Capital D. Buggs, Withdrawals Extermination services revenue Interest revenue Sales Cost of goods sold Deprec, expense-Trucks Deprec. expense-Equip Wages expense Interest expense Rent expense Bad debts expense Miscellaneous expense Repairs expense Utilities expense Warranty expense 18,000 18,000 74.975 8,200 66,775 68 888 82.851 956 82,851 48,700 6.200 48,700 6,200 7,060 43,000 7,060 0 43,000 0 17.000 1000000 0000 0 17,000 583 1,281 12,000 8.400 2,671 1,258 12.000 8.400 0 2671 Totals Req 1 Reg 2 Reg 3 Req 4A Req 4B Req 4C Prepare journal entries to record the adjustments entered on the six-column table. Assume Bug-Off's adjusted balance f Merchandise Inventory matches the year-end physical count. (If no entry is required for a particular transaction, select journal entry required" in the first account field. Do not round your intermediate calculations.) No Transaction General Journal Credit Miscellaneous expenses Accounts payable Debit 23 2,095 Interest revenue 68 2,050 Cash (61) 687 Allowance for doubtful accounts Accounts receivable 687 (62) 583 Bad debts expense Allowance for doubtful accounts 583 6,200 Depreciation expense-Trucks Accumulated depreciation-Trucks 6,200 7.060 Depreciation expense-Equipment Accumulated depreciation-Equipment 7,060 8,200 Extermination services revenue Unearned services revenue 8,200 (f) 2,671 Warranty expense Estimated warranty liability 2,671 8 (9) No journal entry required Reg 1 Req 2 Reg 3 Reg 4A Req 48 Reg 4C Prepare a single-step income statement for year 2019. BUG-OFF EXTERMINATORS Income Statement For Year Ended December 31, 2019 Revenues Extermination services revenue Sales Interest revenue 66,775 82,851 956 $ 150,582 Total revenues Expenses Cost of goods sold Depreciation expense-Trucks Depreciation expense-Equipment Wages expense Repairs expense 48,700 6,200 7,060 43,000 12,000 17,000 583 1,281 8,400 2,671 Rent expense Bad debts expense Miscellaneous expenses Utilities expense Warranty expense 01 OOOOoooooo Total expenses Net income 146,895 3,687 Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Rega Req 2 Reg 3 Req3 Regan Req 4A | Reg 4B | Req4C Req 4B Req 4C Prepare a statement of owner's equity (cash withdrawals during 2019 were $18,000) for year 2019 and there were no investments by the owner in the current year. BUG-OFF EXTERMINATORS Statement of Owner's Equity For Year Ended December 31, 2019 D. Buggs, Capital, December 31, 2018 $ Add: Net income 77,700 3,687 81,387 18,000 63,387 Less: Withdrawals by owner D. Buggs, Capital, December 31, 2019 $ Complete this question by entering your answers in the tabs below. Req1 Req 2 Req3 Req 4A Req 4B Reg 4C Prepare a classified balance sheet as at 2019. (Negative amounts should be indicated by a minus sign. Do not round your intermediate calculations.) BUG-OFF EXTERMINATORS Balance Sheet December 31, 2019 Assets Current assets: $ 16,550 Accounts receivable s 4.113 Allowance for doubtful 6.200X accounts 10.313 Merchandise inventory 10.100 Total current assets 36 963 Plant assets Trucks 40,000 Accum. depreciation - 33,800X Trucks 73,800 Equipment 60,200 Accum. depreciation- 7,060% Equipment 67 260 Total plant assets 141.060 Total assets 178 023 Liabilities Current liabilities: Accounts payable S 3,305 Estimated warranty liability 4.471 Uneamed services revenue 8 .200 S 15.976 Total current liabilities Long-term abilities: Long-term notes payable Total abilities Equity D. Buggs, Capital 19.000 34.976 Total liabilities and equity S 34,976