Journal entry worksheet Prepare a single-step income statement for 2021. BUG-OFF EXTERMINATORS Income Statement For Year Ended December 31, 2021 Revenues Total revenues $ 0 Expenses Total expenses 0 $ 0 Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Reg 4B Req 4C Prepare the statement of retained earnings (cash dividends during 2021 were $10,000) for 2021. BUG-OFF EXTERMINATORS Statement of Retained Earnings For Year Ended December 31, 2021 0 $ 0 Req 1 Req 2 Req3 Req 4A Req 4B Req 4C Prepare a classified balance sheet for December 31, 2021. (Amounts to be deducted should be indicated with a minus sign.) BUG-OFF EXTERMINATORS Balance Sheet December 31, 2021 Assets Current assets: 0 Total current assets 0 Plant assets: 0 0 Total plant assets 0 T Total assets $ 0 Liabilities Current liabilities: Total current liabilities $ 0 Long-term liabilities: Total liabilities 0 Equity 0 Total equity Total liabilities and equity 0 Req 4B Req 40 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, 2021. 0 December 31, 2021 Unadjusted Trial Balance Debit Credit Cash $ 17,000 Accounts receivable 4,000 Allowance for doubtful accounts $ 828 Merchandise inventory 11,700 Trucks 32,000 Accumulated depreciation-Trucks Equipment 45,000 Accumulated depreciation-Equipment 12,200 Accounts payable 5,000 Estimated warranty liability 1,400 Unearned services revenue Interest payable Long-term notes payable 15,000 Common stock Son 20,000 Retained earnings 39,700 10,000 Extermination services revenue 60,000 Interest revenue 872 Sales (of merchandise) 71,026 Cost of goods sold 46,300 Depreciation expense-Trucks Depreciation expense-Equipment 0 Wages expense 35,000 Interest expense Rent expense Bad debts expense Miscellaneous expense 1,226 Repairs expense 8,000 Utilities expense Warranty expense Totals $ 226,026 $ 226, 026 Dividends 9,000 6,800 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, 2021, 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) $ 15,100 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 Expected salvage value Useful life (years) $ 32,000 $ 8,000 4 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 Expected salvage value Useful life (years) Sprayer $ 27,000 $ 3,000 8 Injector $ 18,000 $ 2,500 5 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% 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. 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 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. g. The adjusted 2021 ending balances of the Interest Expense and the Interest Payable accounts. 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 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. 4a. Prepare a single-step income statement for 2021. 4b. Prepare the statement of of retained earnings (cash dividends during 2021 were $10,000), for 2021. 4c. Prepare a classified balance sheet for December 31, 2021. Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3 Req 4A Req 4B Req 4C 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 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. g. The adjusted 2021 ending balances of the Interest Expense and the Interest Payable accounts. Show less a. Reconciled balance of cash a. Omitted check b. Necessary adjustment c. Depreciation expense Sprayer Injector d. Depreciation expense Extermination Services Revenue Unearned Services Revenue e. Ending balances after adjustment Warranty Expense Estimated Warranty Liability f. Ending balances after adjustment Interest Expense Interest Payable g. Ending balances after adjustment Reg 1 Req2 > 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. BUG-OFF EXTERMINATORS December 31, 2021 Unadjusted Trial Balance Adjustments Debit Credit Debit Credit Account Title Adjusted Trial Balance Debit Credit Cash $ 17,000 4,000 Accounts receivable $ 828 Allowance for doubtful accounts Merchandise inventory 11,700 Trucks 32,000 0 Accumulated depreciation-Trucks Equipment 45,000 Accumulated depreciation Equipment 12,200 5,000 Accounts payable Estimated warranty liability Unearned services revenue 1,400 0 0 Interest payable Long-term notes payable 15,000 Common stock 20,000 39,700 Retained earnings Dividends 10,000 Extermination services revenue 60,000 Interest revenue 872 Sales 71,026 46,300 Cost of goods sold Depreciation expense-Trucks 0 O Depreciation expenseTrucks Depreciation expense-Equipment 0 Wages expense 35,000 Interest expense 0 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 $ 0 $ 0 $ 0 $ 0 Req 1 Req3 > Req 1 Reg 2 Req 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 for Merchandise Inventory matches the year-end physical count. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the adjustment to the Cash account. Note: Enter debits before credits. Transaction General Journal Debit Credit (a) Record entry Clear entry View general journal Journal entry worksheet Record the write off of uncollectible accounts. Note: Enter debits before credits. Transaction General Journal Debit Credit (51) Record entry Clear entry View general journal Journal entry worksheet Record the adjustment for bad debts. Note: Enter debits before credits. Transaction General Journal Debit Credit (b2) Record entry Clear entry View general journal Journal entry worksheet Record depreciation on the truck. Note: Enter debits before credits. Transaction General Journal Debit Credit (c) Record entry Clear entry View general journal Journal entry worksheet Record depreciation on the equipment. Note: Enter debits before credits. Transaction General Journal Debit Credit (d) Record entry Clear entry View general journal Journal entry worksheet Journal entry worksheet