Accounts Receivable and Extermination Services Revenue
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, 2011.
BUG-OFF EXTERMINATORS
December 31, 2011
Unadjusted 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 -
Interest payable -
Long-term notes payable 15,000
D. Buggs, Capital 59,700
D. Buggs, Withdrawals 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 -
Wages expense 35,000
Interest expense -
Rent expense 9,000
Bad debts expense -
Miscellaneous expense 1,226
Repairs expense 8,000
Utilities expense 6,800
Warranty expense -
Totals 226,026 226,026
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, 2011, includes the following facts.
Cash balance per bank 15,100
Cash balance per books 17,000
Outstanding checks 1,800
Deposit in transit 2,450
Interest earned (on bank account) 52
Bank service charges (miscellaneous expense) 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,
BUG-OFF EXTERMINATORS
December 31, 2011
Unadjusted 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 -
Interest payable -
Long-term notes payable 15,000
D. Buggs, Capital 59,700
D. Buggs, Withdrawals 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 -
Wages expense 35,000
Interest expense -
Rent expense 9,000
Bad debts expense -
Miscellaneous expense 1,226
Repairs expense 8,000
Utilities expense 6,800
Warranty expense -
Totals 226,026 226,026
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, 2011, includes the following facts.
Cash balance per bank 15,100
Cash balance per books 17,000
Outstanding checks 1,800
Deposit in transit 2,450
Interest earned (on bank account) 52
Bank service charges (miscellaneous expense) 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,