1) The trial balance of Pavilion Security Services Inc as of January 1, ** has the following normal balances: Cash Petty Cash Merchandise inventory (40@ 195,000.00 200.00 2$ 12,400.00 Common stock $ 20,000.00 Retained Earnings 187,600.00 On January 1, purchased land and building for $250,000. The building was appraised at $180,000 and the land at $120, 000. Pavilion paid $50,000 cash and financed the balance. The balance was financed with a 10-year installment note. The note had an interest rate of 8% and annual payment of $29,806 due on the last of the year. On January 1, issued $100,000 of 8 percent, five-year bonds. The bonds were issued at 95. 3 Purchased 300 alarm systems at a cost of $320. Cash was paid for the purchase. Sold 200 alarm systems for $625 cash each plus sales tax of 5 percent. Use FIFO to compute cost of goods sold Sold $120,000 of monitoring services. The customer paid with a credit card. The credit card company charged a 5% fee Replenished the petty cash fund on June 30. The fund has $10 cash and receipts of $155 for yard mowing and $34 for office supplies expense Collected the amount due from the credit card company 6. 7. Paid installers and other employees a total of $100,000 for salaries for the year. Assume the social security tax rate is 6% and the medicare tax rate is 1.5%. Federal income tax withheld amount to $5,000. The net amount of salaries was paid in cash. 8. Paid the payroll liabilities, both the amounts withheld from the salaries plus the employer share of social security tax and medicare tax from the event mentioned above. Disregard unemployment tax in this entry. Paid bond interest and amortized the discount. 10 Paid the annual installment on the amortized note. 11 Adjustments Recognize depreciation expense for the building. The building has a 40-year life and a $10,000 salvage value. 12 The alarm sold above were covered with a one-year warranty. Pavilion estimates that the warranty cost will be 2% of alarm sales. 13 The unemployment tax on the three employees has not been paid. Record the accrued unemployment tax on the salaries for the year. The unemployment tax rate is 5% and gross wages for all employees exceeded $7,00o. 14 Required Record the preceding transactions in general journal format. Round all amounts to the nearest whole dollar. Post the transactions to t accounts Prepare a trial balance b Prepare a multi-step income statement, statement of changes in stockholders' equity,. classified balance sheet, and a statement of changes in cash flow. Prepare the journal entries to close the temporary accounts to retained earnings. Prepare the after closing trial balance
