CI Bug Of 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 $ 17,400 Accounts receivable Allowance for doubtful accounts 5 Merchandise inventory 12.300 Trucks Accum. depreciation-Trucks Equipement 47,000 accum. depreciation Equipment 13,800 Accounts payable 5,100 Estimated warranty Hability 1.500 Unearned services revenue Interest payable Long-ters notes payable 17,000 Connon stock 12.000 Retained earnings Dividends 12,000 Extermination services revenue 64,000 Interest revenue 576 Sales (of merchandise) Cost of goods sold 46,900 Depreciation expense-Trucks Depreciation expense-Equipent ages expense 37,000 Interest expense Rent expense 11,000 Bid debts excente 64F Partly cloudy Bad debts expense Miscellaneous expense Repairs expense Utilities expense Warranty expense Totals 1,234 9,000 7,200 $239,234 5239,234 The following information in a through happles to the company at the end of the current year o. 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) $15,300 17,400 1,900 2.550 56 17 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 $681 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 5710 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 BeF Partly cloudy Check my wol b. An examination of customers' accounts shows that accounts totaling $681 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 $710 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 $33,000 Original cost Expected salvage value Useful life (years) 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 Sprayer Injector Original cost $21,600 $18,400 Expected salge value $3,000 $2,700 Useful life years) 5 e. On September 1, 2019, the company is paid 55100 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 25% of the extermination services revenue of 560,600 for 2019. No warranty expense has been recorded for 2019. All costs of servicing warranties in 2019 were property debited to the Estimated Warranty Liability account g. The S16,000 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 B4F Partly cloudy w c O g. The $16.000 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 $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 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 9. 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-Off's adjusted balance for Merchandise Inventory matches the year-end physical count 4. Prepare a single-step income statement for year 2019 4b. Prepare the statement of retained earnings (cash dividends during 2019 were $12,000) for 2019, 4c. Prepare a classified balance sheet as at 2019. Complete this question by entering your answers in the tabs below
