Comprehensive Problem Bug-Off Exterminators 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 1, 2019 Unadjusted Trial balance Cash $ 20,eee Accounts receivable 5,500 Allowance for doubtful accounts $ 858 Merchandise Inventory 8,780 Trucks 47,000 Accum. depreciation-Trucks Equipment 92,480 Accum, depreciation Equipment 24,280 Accounts payable 5,750 Estimated warranty liability 2,150 Unearned services revenue e Interest payable Long-term notes payable 22,50 D. Burgs, Capital 93,80 D. Buggs, withdrawals 25,eee Extermination services revenue 88,275 Interest revenue 902 Sales (of serchandise) 111,551 Cost of goods sold 50,888 Depreciation expense-Trucks Depreciation expense-Equipment Hages expense 5e,eee Interest expense a Rent expense 24,000 Bad debts expense Miscellaneous expense 1,286 Repairs expense 15,500 Utilities expense 9,880 Warranty expense Totals $349,986 5349,986 e 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) $16,680 2e, cee 2,550 3,200 82 38 Reported on the bank statement is a canceled check that the company failed to record. (Information from the bank reconcilijon 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 $694 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 $775. 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) 339, see $14,000 4 d. Two items of equipment (a sprayer and an injecton) 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 339,000 $21,000 $3,000 $4,000 5 e. On September 1, 2019, the company is paid $20,700 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 1. 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 $74,475 for 2019. No warranty expense has been recorded for 2019. All costs of servicing warranties in 2019 9. The $22,500 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 $8,700. 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. 1. 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 gand then completing the adjusted trial balance columns. Hint Item 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 year 2019. 46. Prepare a statement of owner's equity (cash withdrawals during 2019 were $25,000) for year 2019 and there were no investments 4c. Prepare a classified balance sheet as at 2019, Complete this question by entering your answers in the tabs below. Reg 1 Req2 Req3 Reg 4A Reg 4B Reg 4C Use the results of part 1 to complete the si-column table by first entering the appropriate adjustments for items a through 9 and then completing the adjusted trial balance columns. Hint. Item requires two adjustments. (Do not round your intermediate calculations.) BUG OFF EXTERMINATORS December 31, 2019 Account Title Adjusted Trial Balance Debit Credit $ 200 4,806 $ 775 December 31, 2019 Uradjusted Trial Balance Adjustments Debit Credit Debit Credit $ 20,000 5,500 694 5 858 $ 6941 611 8,700 47.000 0 6.375 92,400 24,200 7,900 5,750 2.150 0 13,800 0 8,700 47,000 92,400 32,100 13,800 22.500 22.500 93.800 Cash Accounts receivable Allowance for doubtful accounts Merchandise inventory Trucks Accum. deprec.--Trucks Equipment Accum. deprec.-Equip Accounts payable Estim, warranty liability Unearned 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 Totals 25,000 88.275 002 111 551 50.800 0 0 50,000 0 24.000 0 1.286 15.500 9.800 0 $ 349,988 $ 349.980 S 894 $ 29,380 $ 153.108 S 69,175