Bug-Off Exterminators provides pest control services and sells extermination products manufactured by other companies

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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, 2013.

BUG-OFF EXTERMINATORS

December 31, 2013

Unadjusted Trial Balance Cash $ 16,900

Accounts receivable 5,700

Allowance for doubtful accounts $ 828

Merchandise inventory 12,900

Trucks 31,560

Accum. depreciation—Trucks 0

Equipment 48,030

Accum. depreciation—Equipment 12,300

Accounts payable 5,400

Estimated warranty liability 1,260

Unearned services revenue 0

Interest payable 0

Long-term notes payable 14,100

D. Buggs, Capital 69,018

D. Buggs, Withdrawals 10,300

Extermination services revenue 59,920

Interest revenue 866 Sales (of merchandise) 72,926

Cost of goods sold 48,200

Depreciation expense—Trucks 0

Depreciation expense—Equipment 0

Wages expense 36,300

Interest expense 0

Rent expense 10,700

Bad debts expense 0

Miscellaneous expense 1,228

Repairs expense 9,800

Utilities expense 5,000

Warranty expense 0

Totals $ 236,618 $ 236,618

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, 2013, includes the following facts. Cash balance per bank $ 14,900 Cash balance per books 16,900 Outstanding checks 1,860 Deposit in transit 2,390 Interest earned (on bank account) 41 Bank service charges (miscellaneous expense) 25 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 $674 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 $717.

c. A truck is purchased and placed in service on January 1, 2013. Its cost is being depreciated with the straight-line method using the following facts and estimates. Original cost $ 31,560 Expected salvage value 6,800 Useful life (years) 4

d. Two items of equipment (a sprayer and an injector) were purchased and put into service in early January 2011. They are being depreciated with the straight-line method using these facts and estimates. Sprayer Injector Original cost $ 28,880 $ 19,150 Expected salvage value 4,800 3,000 Useful life (years) 8 5

e. On August 1, 2013, the company is paid $4,560 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 1.5% of the extermination services revenue of $57,260 for 2013. No warranty expense has been recorded for 2013. All costs of servicing warranties in 2013 were properly debited to the Estimated Warranty Liability account.

g. The $14,100 long-term note is an 9%, 5-year, interest-bearing note with interest payable annually on December 31. The note was signed with First National Bank on December 31, 2013.

h. The ending inventory of merchandise is counted and determined to have a cost of $12,900. 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.

b. Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful Accounts.

c. Depreciation expense for the truck used during year 2013.

d. Depreciation expense for the two items of equipment used during year 2013.

e. The adjusted 2013 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts. (Do not round your intermediate calculations.)

f. The adjusted 2013 ending balances of the accounts for Warranty Expense and Estimated Warranty Liability.

g. The adjusted 2013 ending balances of the accounts for Interest Expense and Interest Payable.