ROBLEM The trial balance of Pacilio Security Services Inc. as of January 1, 2019, had the following normal balances: Cash Petty cash Accounts receivable Allowance for doubtful accounts Supplies Prepaid rent Merchandise inventory (23 @ $280) Equipment Van Accumulated depreciation Salaries payable Common stock Retained earnings $93,380 100 21,390 2,485 180 3,000 6,440 9,000 27,000 14,900 1,500 50,000 91,605 During 2019 Pacilio Security Services experienced the following transactions 1. Paid the salaries payable from 2018. 2. Paid 59,000 on May 2, 2019 for one year's oflice rent in advance 3. Purchased $425 of supplies on account. a 1991 o 17% Accounting for Current Liabilities and Pay 4. Purchased 145 alarm systems at a cost of $290 each. Paid cash for the purchase 5. After numerous attempts to collect from customers, wrote off $2,060 of uncollectible! accounts receivable. 6. Sold 130 alarm systems for $580 each plus sales tax of 5 percent. All sales were on acent (Be sure to compute cost of goods sold using the FIFO cost flow method.) 7. Billed S107,000 of monitoring services for the year. Credit card sales amounted to $42,000. and the credit card company charged a 4 percent fee. The remaining $65.000 were sales on account. Sales tax is not charged on this service. 8. Replenished the petty cash fund on June 30. The fund had S5 cash and has receipts of S60 for yard mowing, Sis for oflice supplies expense, and S17 for miscellaneous expenses. 9. Collected the amount due from the credit card company. 10. Paid the sales tax collected on S69.600 of the alarm sales. 11. Paid installers and other employees a total of $65,000 for salaries for the year. Assume the Social Security tax rate is 6 percent and the Medicare tax rate is 1.5 percent. Federal income taxes withheld amounted to $7.500. Cash was paid for the net amount of salaries due. 12. Pacilio now offers a one-year warranty on its alarm systems. Paid S1.950 in warranty repairs during the year. 13. On September 1. borrowed S12.000 from State Bank. The note had an 8 percent interest and a one-year term to maturity. 14. Collected S136.100 of accounts receivable during the year 15. Pald S15.000 of advertising expense during the year tools acc100.pdf * Social Security tax rate is 6 percent and the Medicare tax rate is 1.5 percent. Federal income taxes withheld amounted to $7.500. Cash was paid for the net amount of salaries due. 12. Pacilio now offers a one-year warranty on its alarm systems. Paid $1,950 in warranty repairs during the year. 13. On September 1, borrowed $12,000 from State Bank. The note had an 8 percent interest rate and a one-year term to maturity. 14. Collected $136,100 of accounts receivable during the year. 15. Paid S15,000 of advertising expense during the year. 16. Paid $7,200 of utilities expense for the year. 17. Paid the payroll taxes, both the amounts withheld from the salaries plus the employer share of Social Security taand Medicare tax, on $60,000 of the salaries plus $7.000 of the federal income tax that was withheld. (Unemployment taxes were not paid at this time.) 18. Paid the accounts payable. 19. Paid a dividend of S10,000 to the shareholders. Adjustments 20. There was $165 of supplies on hand at the end of the year. 21. Recognized the expired rent for the office building for the year. 22. Recognized uncollectible accounts expense for the year using the allowance method. The company revised its estimate of uncollectible accounts based on prior years experience. This year Pacilio estimates that 2.75 percent of sales on account will not be collected 23. Recognized depreciation expense on the equipment and the van. The equipment has a 5-year life and a $2.000 salvage value. The van has a 4-year life and a $6.000 salvage value. The company uses double-declining-balance for the van and straight-line for the equipment A full year's depreciation was taken in 2018, the year of acquisition 11 T ormistams sold in transaction 6 were covered with a one-year warranty. Pacilio View Window Help 100 company need is estimate of uncollectible account based on prior years experience. This year Pacilo estimates that 2.75 percent of sales on account will not be collected 13. Recognized depreciation expense on the equipment and the van. The equipment has a 5-year life and a $2,000 salvage value. The van has a 4-year life and a $6,000 salvage value. The company uses double-declining-balance for the van and straight line for the equipment (A full year's depreciation was taken in 2013, the year of acquisition.) 24. The alarm systems sold in transaction 6 were covered with a one-year warranty. Pacilio estimated that the warranty cost would be 3 percent of alarm sales 25. Recognized the accrued interest on the note payable at December 31, 2019. 26. The unemployment tax on salaries has not been paid. Record the accrued unemployment tax on the salaries for the year. The unemployment tax rate is 4.5 percent (14,000 of salaries is subject to this tax.) 27. Recognized the employer Social Security and Medicare payroll tax that has not been paid on 55,000 of salaries expense. Required a. Record the above transactions in general journal form. Round all amounts to nearest whole dollar b. Post the transactions to the T-accounts c. Prepare a trial balance d. Prepare an income statement statement of changes in stockholders' equity a classified balance sheet, and statement of cash News e. Close the temporary accounts to retained camnings 1. Post the closing entries to the T-accounts and prepare a post-closing trial balance Type here to search ROBLEM The trial balance of Pacilio Security Services Inc. as of January 1, 2019, had the following normal balances: Cash Petty cash Accounts receivable Allowance for doubtful accounts Supplies Prepaid rent Merchandise inventory (23 @ $280) Equipment Van Accumulated depreciation Salaries payable Common stock Retained earnings $93,380 100 21,390 2,485 180 3,000 6,440 9,000 27,000 14,900 1,500 50,000 91,605 During 2019 Pacilio Security Services experienced the following transactions 1. Paid the salaries payable from 2018. 2. Paid 59,000 on May 2, 2019 for one year's oflice rent in advance 3. Purchased $425 of supplies on account. a 1991 o 17% Accounting for Current Liabilities and Pay 4. Purchased 145 alarm systems at a cost of $290 each. Paid cash for the purchase 5. After numerous attempts to collect from customers, wrote off $2,060 of uncollectible! accounts receivable. 6. Sold 130 alarm systems for $580 each plus sales tax of 5 percent. All sales were on acent (Be sure to compute cost of goods sold using the FIFO cost flow method.) 7. Billed S107,000 of monitoring services for the year. Credit card sales amounted to $42,000. and the credit card company charged a 4 percent fee. The remaining $65.000 were sales on account. Sales tax is not charged on this service. 8. Replenished the petty cash fund on June 30. The fund had S5 cash and has receipts of S60 for yard mowing, Sis for oflice supplies expense, and S17 for miscellaneous expenses. 9. Collected the amount due from the credit card company. 10. Paid the sales tax collected on S69.600 of the alarm sales. 11. Paid installers and other employees a total of $65,000 for salaries for the year. Assume the Social Security tax rate is 6 percent and the Medicare tax rate is 1.5 percent. Federal income taxes withheld amounted to $7.500. Cash was paid for the net amount of salaries due. 12. Pacilio now offers a one-year warranty on its alarm systems. Paid S1.950 in warranty repairs during the year. 13. On September 1. borrowed S12.000 from State Bank. The note had an 8 percent interest and a one-year term to maturity. 14. Collected S136.100 of accounts receivable during the year 15. Pald S15.000 of advertising expense during the year tools acc100.pdf * Social Security tax rate is 6 percent and the Medicare tax rate is 1.5 percent. Federal income taxes withheld amounted to $7.500. Cash was paid for the net amount of salaries due. 12. Pacilio now offers a one-year warranty on its alarm systems. Paid $1,950 in warranty repairs during the year. 13. On September 1, borrowed $12,000 from State Bank. The note had an 8 percent interest rate and a one-year term to maturity. 14. Collected $136,100 of accounts receivable during the year. 15. Paid S15,000 of advertising expense during the year. 16. Paid $7,200 of utilities expense for the year. 17. Paid the payroll taxes, both the amounts withheld from the salaries plus the employer share of Social Security taand Medicare tax, on $60,000 of the salaries plus $7.000 of the federal income tax that was withheld. (Unemployment taxes were not paid at this time.) 18. Paid the accounts payable. 19. Paid a dividend of S10,000 to the shareholders. Adjustments 20. There was $165 of supplies on hand at the end of the year. 21. Recognized the expired rent for the office building for the year. 22. Recognized uncollectible accounts expense for the year using the allowance method. The company revised its estimate of uncollectible accounts based on prior years experience. This year Pacilio estimates that 2.75 percent of sales on account will not be collected 23. Recognized depreciation expense on the equipment and the van. The equipment has a 5-year life and a $2.000 salvage value. The van has a 4-year life and a $6.000 salvage value. The company uses double-declining-balance for the van and straight-line for the equipment A full year's depreciation was taken in 2018, the year of acquisition 11 T ormistams sold in transaction 6 were covered with a one-year warranty. Pacilio View Window Help 100 company need is estimate of uncollectible account based on prior years experience. This year Pacilo estimates that 2.75 percent of sales on account will not be collected 13. Recognized depreciation expense on the equipment and the van. The equipment has a 5-year life and a $2,000 salvage value. The van has a 4-year life and a $6,000 salvage value. The company uses double-declining-balance for the van and straight line for the equipment (A full year's depreciation was taken in 2013, the year of acquisition.) 24. The alarm systems sold in transaction 6 were covered with a one-year warranty. Pacilio estimated that the warranty cost would be 3 percent of alarm sales 25. Recognized the accrued interest on the note payable at December 31, 2019. 26. The unemployment tax on salaries has not been paid. Record the accrued unemployment tax on the salaries for the year. The unemployment tax rate is 4.5 percent (14,000 of salaries is subject to this tax.) 27. Recognized the employer Social Security and Medicare payroll tax that has not been paid on 55,000 of salaries expense. Required a. Record the above transactions in general journal form. Round all amounts to nearest whole dollar b. Post the transactions to the T-accounts c. Prepare a trial balance d. Prepare an income statement statement of changes in stockholders' equity a classified balance sheet, and statement of cash News e. Close the temporary accounts to retained camnings 1. Post the closing entries to the T-accounts and prepare a post-closing trial balance Type here to search