4,662 The trial balance of Pacilio Security Services, Inc. as of January 1 Year 11, had the following normal balances. Cash $ 113, 718 Petty cash 1ee Accounts receivable 39,390 Allowance for doubtful accounts Supplies 210 Merchandise Inventory (48 @ $380) 14,400 Equipent 9,000 Van 27,000 Building 125,000 Accumulated depreciation 28.075 Land 25,000 Sales tax payable a90 Employee income tax payable 1.000 FICA-Social Security tax payable 840 FICA-Medicare tax payable 210 Warranty payable 918 Unemployment tax payable 945 Notes payable-building 92,762 Donds payable 50.000 Discount on bonds payable 800 Connon stock 50,000 Retained earnings 124,816 During Year 11. Pacilio Security Services experienced the following transactions: 1. Pald the sales tax payable from Year 10. 2 Pald the balance of the payroll liabilities due for Year 10 federal Income tax, FICA taxes, and unemployment taxes), 3. Issued 5.000 additional shares of the $5 par value common stock for $8 per share, 4 Issued 1.000 shares of $50 stated value, 5 percent cumulative preferred stock for $52 per share. 5. Purchased $500 of supplies on account 6. Purchased 190 alarm systems at a cost of $310. Cash was paid for the purchase 7. After numerous attempts to collect from customers, wrote off $3,670 of uncollectible accounts receivable 8. Sold 210 alarm systems for $600 each plus sales tax of 5 percent. All sales were on account 9. Record the cost of goods sold related to the sale from Event 8 using the FIFO method 10. Billed $125,000 of monitoring services for the year. Credit card sales amounted to $58,000, and the credit card company charged a 4 percent fee. The remaining $67.000 were sales on account. Sales tax is not charged on this service. 11. Replenished the petty cash fund on June 30. The fund had $10 cash and receipts of $75 for yard mowing and $15 for office supplies expense 12 Collected the amount due from the credit card company 13. Paid the sales tax collected on $105,000 of the alarm sales 14 Collected $198,000 of accounts recevable during the year 15. Pald Installers and other employees a total of $96.000 for salanes for the year Assume the Social Security tax rate is 6 percent and the Medicare tax rate is 15 percent Federal income taxes withheld amounted to $10600. No employee exceeded $110.000 in total wages. The not alones were paid in cash 16 on October 1. declared a dividend on the preferred stock and a $1 per share dividend on the common stock to be paid to shareholders of record on October 15, payable on November Year 16. On October 1, declared a dividend on the preferred stock and a $1 per share dividend on the common stock to be paid to shareholders of record on October 15, payable on November 1, Year 11. 17. Pald $1,625 in warranty repairs during the year 18. On November 1, Year 11, pald the dividends that had been previously declared. 19. Pald $18.500 of advertising expense during the year. 20. Pald $6100 of utilities expense for the year 21. Paid the payroll liabilities, both the amounts withheld from the salarles plus the employer share of Social Security tax and Medicare tax, on $88,000 of the salartes plus $9.200 of the federal income tax that was withheld. 22. Paid the accounts payable. 23. Pald bond Interest and amortized the discount. The bond was issued In Year 10 and pays Interest at 6 percent. 24 Paid the annual installment of $14.238 on the amortized note. The interest rate for the note is 7 percent Adjustment 25. There was $190 of supplies on hand at the end of the year 26. Recognized the uncollectible accounts expense for the year using the allowance method. Pacilio now estimates that 1 percent of sales on account will not be collected 27. Recognized depreciation expense on the equipment, van, and building. The equipment, purchased in Year 8. has a five-year life and a $2,000 salvage value. The van has a four-year life and a $6.000 salvage value. The building has a 40-year life and a $10,000 salvage value. The company uses straight-line for the equipment and the building. The van is fully depreciated 28. The alarm systems sold in transaction 8 were covered with a one-year warranty Pacilio estimated that the warranty cost would be 2 percent of alarm sales 29. 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 45 percent and gross wages for all three employees exceeded $7,000. 30. Recognized the employer Social Security and Medicare payroll tax that has not been paid on $8,000 of salartes expense. Pacilio Security Services, Incorporated Effect of Transactions on Financial Statements - Year 11 Balance Sheet Income Statement Stockholders Net Liabilities + Revenue Equity Expenses Income Statement of Cash Flows Assets Transaction 1. OA 2 3 FA + 4 FA + 5. 6. 7 +- OA + + 8. 9. 10 +- +- 11. 12 13 OA OA +- 14 15. 16 17 18 19 20 OA + OA OA OFA 21 22 23 24 25 28 27 28 20 30