Comprehensive Problem is available in Connect with an algorithmic option. CP 11 Bug-Off Exterminators provides pest control services and sells extermination products manufactured by other companies. The following six-column table contains the company's unadjusted trial balance as of December 31, 2021. Unadjusted Adjusted December 31, 2021 Trial Balance Adjustments Trial Balance Cash $ 17,000 Accounts receivable 4,000 Allowance for doubtful accounts $ 828 Merchandise inventory 11,700 Trucks 32,000 Accum, depreciation-Trucks Equipment 45,000 Accum. depreciation-Equipment 12,200 Accounts payable 5,000 Estimated warranty liability 1,400 Unearned services revenue. 0 Interest payable 0 Long-term notes payable 15,000 D. Buggs, Capital 59,700 D. Buggs, Withdrawals 10,000 Extermination services revenue 60,000 872 Interest revenue Sales (of merchandise) 71,026 Cost of goods sold 46,300 Depreciation expense-Trucks Depreciation expense-Equipment 0 0 35,000 Wages expense Wages expense 35,000 Interest expense Rent expense 9,000 Bad debts expense 0 Miscellaneous expense 1,226 Repairs expense 8,000 Utilities expense 6,800 Warranty expense 0 Totals $226,026 $226,026 The following information in a through / applies to the company at the end of the current year. a. The bank reconciliation as of December 31, 2021, includes the following facts. Page 426 Cash balance per bank Cash balance per books Outstanding checks Deposit in transit Interest earned (on bank account) Bank service charges (miscellaneous expense) $15,100 17,000 1,800 2,450 52 15 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 $679 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 $700. 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 $32.000 Expected salvage value $8.000 Useful life (years) 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. Original cost Sprayer Injector $27,000 $18,000 Expected salvage value Useful life (years) $ 3,000 $ 2.500 8 e. On August 1, 2021, the company is paid $3.840 cash in advance to provide monthly service for an apartment complex for one year. The company began providing the services in August. 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 2.5% of the extermination services revenue of $57,760 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 $15,000 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 $11.700. Bug-Off uses a perpetual inventory system. Required 1. Use the preceding information to determine amounts for the following items. a. Correct (reconciled) ending balance of Cash; and the amount of the omitted check. Check (10) Reconciled cash bal, $15,750 b. Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful Accounts. (10) 5551 credit 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. a. Correct (reconciled) ending balance of Cash; and the amount of the omitted check. Check (10) Reconciled cash bat, $15,750 b. Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful Accounts. (16) $551 credit 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. (1r) Estimated Warranty Liability, $2,844 Cr g. The adjusted 2021 ending balances of the Interest Expense and the Interest Payable accounts. (Round amounts to nearest whole dollar.) 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. (2) Adjusted trial balance totals, $238,207 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, a statement of owner's equity (cash withdrawals during 2021 were $10,000 and owner investments were $0), and a classified balance sheet. (4) Net income, $9.274. Total assets, $82,771