Comprehensive Problem Bug-Off Exterminators (Algo) g-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. December 31, 2021 Unadjusted Trial Balance Debit Credit Cash $19,200 Accounts receivable 20,570 Allowance for doubtful accounts $850 Merchandise inventory 15,000 Trucks 43,000 Accumulated depreciation-Trucks 0 Equipment 51,600 Accumulated depreciation-Equipment 14,070 Accounts payable 5,550 Estimated warranty liability 1,950 Unearned services revenue 0 0 Interest payable Long-term notes payable Common stock Retained earnings Dividends Extermination services revenue Interest revenue Sales (of merchandise) Cost of goods sold Depreciation expense-Trucks Depreciation expense-Equipment Wages expense Interest expense Rent expense Bad debts expense Miscellaneous expense Repairs expense Utilities expense Warranty expense Totals 26,000 21,000 63,600 21,000 $2,000 894 93,826 * 49,600 0 46,000 0 20,000 1,270 13,500 9,000 0 $309,740 $309,740 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 $16,200 19,200 LEI - Outstanding checks 2,350 Deposit in transit 3,000 Interest earned (on bank account) 14 Page 1 of 10 1,591 words English (US) 79% + Give Feedback to Microsoft 5:30 PM. Outstanding checks Deposit in transit Interest earned (on bank account) Bank service charges (miscellaneous expense) 2,350 3,000 74 26 Reported on the bank statement is a canceled check that the company failed to record. (Information an account payable.) from the bank reconciliation allows you to determine the amount of this check, which is a payment on b. An examination of customers' accounts shows that accounts totaling $690 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 $755. 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) $43,000 $12,400 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 $29,200 Injector $22,400 $3,000 $3,600 8 5 e. On September 1, 2021, the company is paid $15,900 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 2.5% of the extermination services revenue of $71,400 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. The $26,000 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 $13,900. Bug- Off uses a perpetual inventory system. Required: 1. Determine amounts for the following items: L Correct (reconciled) ending balance of Cash; and the amount of the omitted check. Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful Accounts. k. Depreciation expense for the truck used during year 2021. L Depreciation expense for the two items of equipment used during year 2021. m. The adjusted 2021 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts. Give Feedback to Microsoft n. The adjusted 2021 ending balances of the Warranty Expense and the Estimated Warranty Liability accounts. o. 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 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. 4a. Prepare a single-step income statement for 2021. 4b. Prepare the statement of retained earnings (cash dividends during 2021 were $21,000) for 2021. 4c. Prepare a classified balance sheet for December 31, 2021. etermine amounts for the following items: p. Correct (reconciled) ending balance of Cash; and the amount of the omitted check. q. Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful Accounts. r. Depreciation expense for the truck used during year 2021. s. Depreciation expense for the two items of equipment used during year 2021. " The adjusted 2021 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts. Note: Do not round your intermediate calculations. u. The adjusted 2021 ending balances of the Warranty Expense and the Estimated Warranty Liability accounts. v. The adjusted 2021 ending balances of the Interest Expense and the Interest Payable accounts, D a. Reconciled balance of cash a. Omitted check b. Necessary adjustment c. Depreciation expense $16,850 $2,398 $595 $7,650 Sprayer Injector d. Depreciation expense $3,275 $3,760 Extermination Services Unearned Services Revenue Revenue e. Ending balances after adjustment $71,400 $10,600 Warranty Expense f. Ending balances after adjustment $1,785selected answer correct Estimated Warranty Liability $3,735selected answer correct Interest Expense Interest Payable g. Ending balances after adjustment $0 $0 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. Note: Do not round your intermediate calculations. BUG-OFF EXTERMINATORS December 31, 2021 Unadjusted Tra Account Adjustments Balance Title Credit Debit Creat Debit Adjusted Trial Balance Credit Cash $19,200 Accounts 20.570 receivable Allowance for doubl accounts Merchand 15.000 inventory Trucks 43,000 Accumulate 0 depreciation -Trucks Equipment 51,600 Accumulate depreciation 14.070 Equipment Accounts 5,550 Estimated 1,950 sability Uneamed services 0 revenue Interest payable Long-term notes 25,000 payable Common 21,000 stock Retained 63,600 eamings Dividends 21,000 Extermina on services 82,000 revenue Interest 894 revenue Sales 93,826 Cost of 4900 goods sold Depreciatio expense- Trucks Depreciatio n expense- 0 Wages 46,000 expense Interest 0 expense Rent 20,000 expense Bad debts 0 expense Miscelaneo 1,270 us expense Repairs 13,500 expense Utates 9,000 expense Warranty 0 expense Totals $309,740 $309,740 $3,000 $3,730 $16.850 $215 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. Note: If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Do not round your intermediate calculations. No Transaction (a) General Journal Debit Credit Prepare a single-step income statement for 2021. BUG-OFF EXTERMINATORS Income Statement For Year Ended December 31, 2021 Revenues Total revenue BUG-OFF EXTERMINATORS Income Statement For Year Ended December 31, 2021 ' $176,720 Total expenses Net incomes elected answer correct 158,785 $17,935 Prepare the statement of retained earnings (cash dividends during 2021 were $21,000) for 2021. BUG-OFF EXTERMINATORS Statement of Retained Earnings For Year Ended December 31, 2021 0 $0 Prepare a classified balance sheet for December 31, 2021. Note: Amounts to be deducted should be indicated with a minus sign. Do not round your intermediate calculations. 1 File Home Insert Layout References Review View Help O 5 2 W 3 689 BIU Current assets Total current assets Plant assets: Total plant assets Total assets Current labies Total current Babes Long-term labbes Totalbes Total equity Total and equity 4 F R 5 T ... BUG-OFF EXTERMINATORS Balance Sheet December 31, 2021 Assets V 0 50 Liabilities 50 0 Equity 30 0 0 6 8 9 0 Y P v 1 Share v 2x