Question

Worksheet Adjustments - Prepare adjustments for the following transactions in journal entry form and also record each adjustment on the worksheet using the Unadjusted Trial Balance of Bugs-Off Exterminators (See Comprehensive Problem at the end of Chapter 11 - Pg. 504). Complete worksheet through adjusted trial balance and prepare an income statement, statement of owner's equity and balance sheet. a. Bug-Off Exterminators uses the allowance method when accounting for bad debts. The company has to write off an accounts receivable of $1,000 that will not be collected. b. An aging of account receivable reflected a credit balance of $700 that is to be reported for the allowance for doubtful accounts as of December 31, 2017 C. A trucks costing $32,000 were purchased on 1/1/2017. It is to be used for 6 years and has a salvage value of $2,000 at the end of 6 years. Depreciation is calculated using the straight line method. Record depreciation expense on the truck for 2017 d. Bug-Off Exterminators owned equipment of consisting of a sprayer and an injector as of 1/1/2017. Both are depreciated using the straight line method. The sprayer cost $27,000, has a useful file of 6 years and a salvage value of $ $6,000 at the end of 6 years. The injector cost $18,000, has a useful life of 4 years, and a salvage value of $10,800 at the end of 4 years. Record the depreciation on this equipment for 2017. e. Bugs-Off received $3,840 on 6/1/2017 for extermination services that are to be provided for one year commencing 6/1/2017. This advance payment was credited to Extermination services revenue when it was received. Record the adjusting entry required on 12/31/2017 in connection with this advance payment received. f. The company offers a warranty for services it sells. The expected cost of providing warranty services is 2% of the extermination services revenue of $58,400 for 2017. No warranty expense has been recorded for 2017. Record the expected warranty cost on the 2017 extermination revenue service

Answer 1

Requirement (a)
Date	Accounts Title and Explaination	Debit	Credit
Mar-09	Treasury Stock	$ 3,14,400.00
	Cash		$ 3,14,400.00
	(To Record reacquired common stock)
Jun-09	Cash	$ 2,07,500.00
	Treasury Stock		$ 1,99,200.00
	Paid in capital from sale of treasury stock		$      8,300.00
	(To Record sale reacquired common stock)
Nov-13	Cash	$     83,700.00
	Treasury Stock		$    74,400.00
	Paid in capital from sale of treasury stock		$      9,300.00
	(To Record sale reacquired common stock)
Requirement (b)
Balance in Paid in capital from sale of treasury stock on Dec 31			$17,600.00
($8300+$9300)
Requirement (C.)
Balance in treasury stock on Dec 31			$40,800.00
(13100-8300-3100)*$24
Requirement (d.)
Balance in Treasury stock is reported as deduction from Total of paid in capital
and Retained earnings