The trial balance of Pacilio Security Services, Inc. as of January 1, Year 7, had the following normal balances: Cash Petty cash Accounts Receivable Supplies Prepaid Rent Merchandise Inventory (23 $280) Land Accounts Payable Salaries Payable Connon Stock Retained Earnings $78,972 100 33,440 160 3,200 6,440 4.000 250 1,400 50,000 74,662 During Year 7. Pacilio Security Services experienced the following transactions: 1. Paid the salaries payable from Year 6. 2. Paid $4,800 on March 1 Year 7, for one year's lease in advance on the company van, 3. Paid $8,400 on May 2, Year 7. for one year's office rent in advance. 4. Purchased $550 of supplies on account 5. Pald cash to purchase 105 alarm systems at a cost of $285 each. 6. Pocillo has noticed its accounts receivable balance is growing more than desired and some collection problems oxist. It appears that uncollectible accounts expense is approximately 3 percent of total credit sales. Pacillo has decided it will starting this year adopt the allowance method of accounting for uncollectible accounts. It will record an adjusting entry to recognize the estimate at the end of the year 7 In trying to collect several of its delinquent accounts, Pacitio has learned that these customers have either declared bankruptcy or moved and left no forwarding address. These uncollectible accounts amount to $1.900. 8. Sold 110 alarm systems for $63,800. All sales were on account 9. Record the cost of goods sold related to the sale from Event 8 using the FIFO method 10. Pald the balance of the accounts payable. 11. Pacilio began accepting credit cards for some of its monitoring service sales. The credit card company charges a fee of 4 percent Total monitoring services for the year were $68,000. Pacilo accepted credit cards for $24,000 of this amount. The other $44.000 was sales on account 12. On July 1 Year 7. Pacillo replenished the petty cash fund. The fund contained $21 of currency and receipts of $50 for yard mowing, $22 for office supplies expense, and $9 for miscellaneous expenses. 13. Collected the amount due from the credit card company. 14. Paid installers and other employees a total of $45,000 cash for salaries. 15. Collected $116,800 of accounts receivable during the year 16. Paid $9,500 of advertising expense during the year 17 Paid $5,200 of utilities expense for the year. 18. Paid a dividend of $20,000 to the shareholders. Adjustments 19. There was $250 of supplies on hand at the end of the year. 20. Recognized the expired rent for both the van and the office for the year. 21. Recognized the uncollectible accounts expense for the year using the allowance method 22. Accrued salaries at December 31, Year 7 were $2,100. Requirement General Journal General Ledger Trial Balance Income Statement Changes in SE Balance Sheet Statement of CF Analysis Prepare the journal entries to record transactions (1) through (18). Then prepare the necessary adjusting entries (19) through (22) to correctly report net income for the period. Then record the closing entries (23) through (25) as of December 31, Year 7. (If no entry is required for a transaction, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet 8 25 > Paid the salaries payable from Year 6. NoteEnter debts before credits Data General Journal Debit Credia View transaction list X: 1 Paid the salaries payable from Year 6. 2 Paid $4,800 on March 1, Year 7, for one year's lease in advance on the company van. 3 Paid $8,400 on May 2, Year 7, for one year's office rent in advance. 4 Purchased $550 of supplies on account. 5 Paid cash to purchase 105 alarm systems at a cost of $285 each. View transaction list OX: x X: 6 Pacilio has noticed its accounts receivable balance is growing more than desired and some collection problems exist. It appears that uncollectible accounts expense is approximately 3 percent of total credit sales. Pacilio has decided it will, starting this year, adopt the allowance method of accounting for uncollectible accounts. It will record an adjusting entry to recognize the estimate at the end of the year. 7 In trying to collect several of its delinquent accounts, Pacilio has learned that these customers have either declared bankruptcy or moved and left no forwarding address. These uncollectible accounts amount to $1,900. 8 Sold 110 alarm systems for $63,800. All sales were on account. View transaction list OX: 9 Record the cost of goods sold related to the sale from Event 8 using the FIFO method. 10 Paid the balance of the accounts payable. 11 Pacilio began accepting credit cards for some of its monitoring service sales. The credit card company charges a fee of 4 percent. Total monitoring services for the year were $68,000. Pacilio accepted credit cards for $24,000 of this amount. The other $44,000 was sales on account. 12 On July 1, Year 7, Pacilio replenished the petty cash fund. The fund contained $21 of currency and receipts of $50 for yard mowing, $22 for office supplies expense, and $9 for miscellaneous expenses. View transaction list .: 1.1 X 13 Collected the amount due from the credit card company. 14 Paid installers and other employees a total of $45,000 cash for salaries. 15 Collected $116,800 of accounts receivable during the year. 16 Paid $9,500 of advertising expense during the year. 17 Paid $5,200 of utilities expense for the year. 18 Paid a dividend of $20,000 to the shareholders. 19 There was $250 of supplies on hand at the end of the year. View transaction list x X year. 25 20 Recognized the expired rent for both the van and the office for the year. 21 Recognized the uncollectible accounts expense for the year using the allowance method. 22. Accrued salaries at December 31, Year 7, were $2,100. Cr 23 Record the closing entry for the reven enue accounts. 24 Record the closing entry for the expense accounts. 25 Record the closing entry for dividends account. Note : - journal entry has been entered
