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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,

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.

December 31, 2019
Unadjusted Trial Balance
Cash $ 20,200
Accounts receivable 5,600
Allowance for doubtful accounts $ 860
Merchandise inventory 16,500
Trucks 48,000
Accum. depreciationTrucks 0
Equipment 97,000
Accum. depreciationEquipment 25,000
Accounts payable 5,800
Estimated warranty liability 2,200
Unearned services revenue 0
Interest payable 0
Long-term notes payable 31,000
Common stock 26,000
Retained earnings 70,100
Dividends 26,000
Extermination services revenue 92,000
Interest revenue 904
Sales (of merchandise) 113,826
Cost of goods sold 51,100
Depreciation expenseTrucks 0
Depreciation expenseEquipment 0
Wages expense 51,000
Interest expense 0
Rent expense 25,000
Bad debts expense 0
Miscellaneous expense 1,290
Repairs expense 16,000
Utilities expense 10,000
Warranty expense 0
Totals $ 367,690 $ 367,690

The following information in a through h applies to the company at the end of the current year.

  1. The bank reconciliation as of December 31, 2019, includes the following facts.

Cash balance per bank $ 16,700
Cash balance per books 20,200
Outstanding checks 2,600
Deposit in transit 3,250
Interest earned (on bank account) 84
Bank service charges (miscellaneous expense) 31

Required: 1. Determine amounts for the following items:

  1. Correct (reconciled) ending balance of Cash; and the amount of the omitted check.
  2. Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful Accounts.
  3. Depreciation expense for the truck used during year 2019.
  4. Depreciation expense for the two items of equipment used during year 2019.
  5. The adjusted 2019 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts.
  6. The adjusted 2019 ending balances of the accounts for Warranty Expense and Estimated Warranty Liability.
  7. 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 b requires two adjustments. 3. Prepare journal entries to record the adjustments entered on the six-column table. Assume Bug-Offs adjusted balance for Merchandise Inventory matches the year-end physical count. 4a. Prepare a single-step income statement for year 2019. 4b. Prepare the statement of retained earnings (cash dividends during 2019 were $26,000) for 2019. 4c. Prepare a classified balance sheet as at 2019.

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