Safe and Sound Security, Inc. is a security business with the following account balances as of

1/1/2015.

Cash----------------------------------------------------$ 7,020

Petty cash--------------------------------------------- 250

Accounts receivable -------------------- 15,000

Allowance for doubtful accounts ---------------- 3,000

Supplies inventory --------------------- 500

Prepaid rent---------------------------------------------- 6,000

Merchandise inventory (40 @ $400) -------------16,000

Equipment----------------------------------------------- 4,000

Van--------------------------------------------------------35,000

Accumulated depreciation---------------------------19,100

Sales tax payable------------------------------------------400

Federal income tax payable-----------------------------750

FICA - Social Security tax payable -----------------1,240

FICA - Medicare tax payable ---------------------------270

Warranty payable------------------------------------------850

Unemployment tax payable ----------------------------300

Interest payable--------------------------------------------600

Note payable - State Bank---------------------------10,000

Common stock------------------------------------------20,000

Retained earnings -------------------------------------27,260

Note: although all accounts are shown with a positive balance, they have the normal debit or credit balance that accounts in their account type have (e.g. - assets have a debit balance, liabilities have a credit balance).

During 2015, Safe and Sound Security, Inc. experienced the following transactions:

1. Paid the sales tax payable from 2014.

2. Paid the balance of all the payroll liabilities due for 2014.

3. On January 1, 2016, purchased land and a building for $100,000. The building was appraised at $75,000 and the land at $25,000. Safe and Sound paid $10,000 cash and financed the balance. The balance was financed with a 10-year installment note. The note had an interest rate of 5% and annual payments of $11,655 (including both principal and interest) due on the last day of the year.

4. Purchased $1,000 of Supplies inventory.

5. Purchased 50 alarm systems at a cost of $375. Cash was paid for the purchase.

6. After numerous attempts to collect from customers, wrote off $2,000 of uncollectible accounts receivable.

7. Sold 80 alarm systems for $500 each plus sales tax of 6 percent. All sales were on account. (Be sure to compute cost of goods sold using the FIFO cost flow method).

8. Billed $100,000 of monitoring services for the year. Credit card sales amounted to $36,000, and the credit card company charged a 3% fee. The remaining $64,000 were sales on account. Sales tax is not charged on this service. Net credit card sales are posted to accounts receivable until cash is received from the credit card company.

9. Replenished the petty cash fund at June 30. The fund had $50 cash and receipts of $125 for yard mowing and $75 for office supplies expense.

10. Collected the amount due from the credit card company.

11. Paid the sales tax collected on $20,000 of the alarm sales.

12. Collected $115,000 of accounts receivable during the year.

13. Paid installers and other employees a total of $60,000 for salaries for the year. Use the current Social Security tax and Medicare rates of 6.2% and 1.45%, respectively. Federal income taxes withheld amounted to $6,000. The net amount of salaries was paid in cash. (Disregard unemployment taxes in this entry).

14. Paid $1,000 in warranty repairs during the year for systems installed in the previous year. Prior year warranty expense was estimated at 2% of sales.

15. On September 1, paid in full the note payable owed to State Bank plus $1,100 of interest. All interest payable at January 1 was owed to State Bank relating to this note payable.

16. Paid $9,000 of advertising expense during the year.

17. Paid payroll liabilities, both the amounts withheld from the salaries plus the employer share of Social Security tax and Medicare tax, on $50,000 of the salaries plus $5,000 of the federal income tax that was withheld. (Disregard unemployment taxes in this entry).

18. Payment was made on the building note payable.

Adjustments:

19. There was $500 of supplies inventory on hand at the end of the year.

20. Recognized the expired rent for the office building for the year. Twenty-four months of rent was originally paid at 1/1/2014.

21. Recognized the uncollectible accounts expense for the year using the

allowance method. Safe and Sound now estimates that 2.0% of sales on account will not be collected.

22. Recognized depreciation expense on the equipment, van, and building. The equipment has a five-year life, the van has a four-year life, and the building has a 40-year life. The company uses straight-line method for all fixed assets. The equipment and van were purchased in 2013

and had a full year depreciation in both 2013 and 2014. Assume no residual value on any

of the assets.

1. Record the above transactions. Round all amounts to the nearest dollar (do not

Include cents). Use the transaction/adjustment numbers above to identify each of the transactions in general journal. General journal should be set up as follows:

Event # Account Title Debit Credit

Please show calculations