The trial balance of Pacilio Security Services, Inc. as of January 1. Year 8, had the following normal balances: Cash Petty cash Accounts receivable Allowance for doubtful accounts Supplies Prepaid rent Merchandise inventory (19 $285) Land Salaries payable Common stock Retained earnings $93,708 100 22,540 1,334 250 3.600 5,130 4.000 2,100 50,000 75,894 During Year 8. Pacilio Security Services experienced the following transactions: 1. Paid the salaries payable from Year 7. 2. Purchased equipment and a van for a lump sum of $36,000 cash on January 2, Year 8. The equipment was appraised for $10,000 and the van was appraised for $30,000 3. Paid $9,000 on May 1, Year 8, for one year's office rent in advance. 4. Purchased $300 of supplies on account 5. Purchased 120 alarm systems at a cost of $280 each. Paid cash for the purchase. 6. After numerous attempts to collect from customers, wrote off $2,350 of uncollectible accounts receivable. 7. Sold 115 alarm systems for $580 each. All sales were on account. 8. Record the cost of goods sold related to the sale from Event 7 using the FIFO method. 9. Billed $86,000 of monitoring services for the year. Credit card sales amounted to $36,000, and the credit card company charged a 4 percent fee. The remaining $50,000 were sales on account. 10. Replenished the petty cash fund on June 30. The fund had $12 cash and receipts of $45 for yard mowing, $28 for office supplies expense, and $11 for miscellaneous expenses. 11. Collected the amount due from the credit card company 12. Paid installers and other employees a total of $52,000 cash for salaries 13. Collected $115,500 of accounts receivable during the year 14. Pald $12,500 of advertising expense during the year. a 15. Paid $6,800 of utilities expense for the year 16. Sold the land, which was purchased in 2011, for $12,000, 17. Paid the accounts payable. 18. Paid a dividend of $10,000 to the shareholders. Adjustments 19. Determined that $180 of supplies were on hand at the end of the year. 20. Recognized the expired rent for both the old van and the office building for the year. The lease on the van was not renewed. Rent paid on March 1, Year 7. for the van was $4.800. 21. Recognized uncollectible accounts expense for the year using the allowance method. Pacilio estimates that 3 percent of sales on account will not be collected 22. Recognized depreciation expense on the equipment and the van. The equipment 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 company uses double-declining balance for the van and straight-line for the equipment 23. Accrued salaries at December 31, Year 8, were $1,500, !!! 1 Paid the salaries payable from Year 7. 2 Purchased equipment and a van for a lump sum of $36,000 cash on January 2, Year 8. The equipment was appraised for $10,000 and the van was appraised for $30,000. w 3 Paid $9,000 on May 1, Year 8, for one year's office rent in advance. 4 Purchased $300 of supplies on account. 5 Purchased 120 alarm systems at a cost of $280 each. Paid cash for the purchase. 6 After numerous attempts to collect from customers, wrote off $2,350 of uncollectible accounts receivable. 7 Sold 115 alarm systems for $580 each. All sales were on account. 8 Record the cost of goods sold related to the sale from Event 7 using the FIFO method. 9 Billed $86,000 of monitoring services for the year. Credit card sales amounted to $36,000, and the credit card company charged a 4 percent fee. The remaining $50,000 were sales on account. 10 Replenished the petty cash fund on June 30. The fund had $12 cash and receipts of $45 for yard mowing, $28 for office supplies expense, and $11 for miscellaneous expenses. 11 Collected the amount due from the credit card company. 12 Paid installers and other employees a total of $52,000 cash for salaries. 13 Collected $115,500 of accounts receivable during the year. 14 Paid $12,500 of advertising expense during the year. 15 Paid $6,800 of utilities expense for the year. 16 Sold the land, which was purchased in 2011, for $12,000. 17 Paid the accounts payable. 18 Paid a dividend of $10,000 to the shareholders. 19 Determined that $180 of supplies were on hand at the end of the year. Prepare the adjusting journal entry, if necessary. 20 Recognized the expired rent for both the old van and the office building for the year. The lease on the van was not renewed. Rent paid on March 1, Year 7, for the van was $4,800. Prepare the adjusting journal entry, if necessary. 21 Recognized uncollectible accounts expense for the year using the allowance method. Pacilio estimates that 3 percent of sales on account will not be collected. Prepare the adjusting journal entry, if necessary. 22 Recognized depreciation expense on the equipment and the van. The equipment 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 company uses double-declining- balance for the van and straight-line for the equipment. Prepare the adjusting journal entry, if necessary. 23 Accrued salaries at December 31, Year 8, were $1,500. Prepare the adjusting journal entry, if necessary. 24 Record the closing entry for the revenue accounts. 25 Record the closing entry for the expense accounts. 26 Record the closing entry for dividends account. No Date General Journal Credit Debit 2,100 1 Dec 31 > Salaries payable Cash O 2,100 2 2 Jan 02 Equipment Van Cash OOO 900 % 2,700 X 36,000 > 3 May 01 9,000 > Prepaid rent Cash O 9,000 > 4 Dec 31 300 > Supplies Accounts payable 300 > 5 Dec 31 Merchandise inventory 33,600 00 Cash 33,600 6 Dec 31 2,350 Allowance for doubtful accounts Accounts receivable 2,350 7 Dec 31 66,700 Accounts receivable Alarm sales 66,700 8 Dec 31 30,490 Cost of goods sold Merchandise inventory 30,490 9 Dec 31 Accounts receivable - Credit card Accounts receivable Security service revenue pls 36,000 50,000 86,000 10 Dec 31 28 Office supplies expense Miscellaneous expense Cash 11 6 Unearned revenue 45 11 Dec 31 Cash 34,560 1,440 Accounts receivable - Credit card > > 36,000 12 Dec 31 52,000 Salaries expense Cash Ols > 52,000 > 13 Dec 31 115,500 Cash Accounts receivable 115,500 14 Dec 31 12,500 Advertising expense Cash 12,500 15 Dec 31 6,800 Utilities expense Cash 6,800 16 Dec 31 12.000 Cash Gain on sale of land 8,000 Land 4,000 17 Dec 31 300 Accounts payable Cash >> 300 18 Dec 31 Dividends 10,000 Cash 10,000 19 Dec 31 370 Supplies expense Supplies 370 20 Mar 01 6,800 Rent expense Prepaid ront SIS 6,800 21 Dec 31 4,517 Uncollectible accounts expense Allowance for doubtful accounts pl 4,517 22 Dec 31 14,900 Depreciation expense Equipment Van 1,400 13,500 23 Dec 31 1,500 Salaries expense Salaries payable >> 1,500 24 Dec 31 Alarm sales Unearned revenue Gain on sale of land Retained earnings O 152,700 45 X 8,000 160,745 X 25 Dec 31 > 131,356 Retained earnings Advertising expense Uncollectible accounts expense Other operating expense Cost of goods sold Depreciation expense Miscellaneous expense Office supplies expense Rent expense Salaries expense Supplies expense Utilities expense 12,500 4,517 1.440 30,490 14,900 11 28 6,800 53,500 370 6,800 26 Dec 31 10,000 Retained earnings Dividends 10,000
