Questions 2 & 3

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, 2019 December 31, 2017 Trial Balance Adjustments Adusted Triw Balance SO Accounts receivable Allowara duttal anants Merchandise awary Trucks Acum depreciation-Trucks 11 31.000 12.00 Accum. depreciation Equipment Accounts payable Botimated warranty liability Uamedre Intereste Long-term este D. Bag, Capital D. Be Withdrawal termination de 15.00 59.700 100 8 7 Sales of merchandise) Corted good old Depreciation experiment Wagne SA Bladet Warranty The following information in a through happlies to the company at the end of the current year, a. The bank reconciliation as of December 31, 2019, includes the following facts Page 42 6,800 Waste Totals The following information in a through happlies to the company at the end of the current year, a. The bank reconciliation as of December 31, 2019, includes the following facts. Page 42 $15,100 17.000 1.800 2.450 15 Cash balance per bank Cash balance per books Outstanding checks Deposit in transit Interest earned (on bank account) Bank service charges (miscellaneous expense) Reported on the bank statement is a canceled check that the company falled 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 writen 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, 2019. Its cost is being depreciated with the straight-line method using the following facts and estimates. Original cost $32,000 Expected salvage value 3,000 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 Original cost Expected salvage value Uwful life years) Sprayer Injector $27,000 $18,000 $3,000 $2.500 8 c. On August 1, 2019, 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 termination Services Revenue account The company offers a warranty for the visit well. The expected cost of providing warranty service is 2.5 of the extermination services revenue of $87.760 for 2019. No warranty expense has been recorded for 2019. All costs of servicing warranties in 2019 were properly debuted to the Estimated Warranty Liability account * 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 Pint National Bank on December 31, 2019. 1. The ending inventory of merchandise is counted and determined to have a cost of $11.700. Bug Offes a perpetual inventory system Required 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 brequires 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-Offs 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 2019 were $10,000), and a classified balance sheet