The account balances of Pacilio Security Services, Incorporated as of January 1, Year 10, are shown here: Cash Petty Cash Accounts Receivable Allowance for doubtful accounts Supplies Prepaid rent Merchandise inventory (38 $290) Equipment Van Accumulated depreciation Sales tax payable Employee income tax payable PICA-Social Security tax payable FICA-Medicare tax payable Warranty payable Unemployment tax payable Interest payable Notes payable Common stock Retained earnings $122,475 100 27,400 4,390 165 3,000 11,020 9,000 27,000 23,050 290 500 600 150 312 630 320 12,000 50,000 107,918 During Year 10, Pacillo Security Services experienced the following transactions: 1. Paid the sales tax payable from Year 9. 2. Paid the balance of the payroll liabilities due for Year 9 (federal income tax, FICA taxes, and unemployment taxes) 3. On January 1, Year 10, purchased land and a building for $150,000. The building was appraised at $125,000 and the land at $25,000 Pacillo paid $50,000 cash and financed the balance. The balance was financed with a 10-year installment note. The note had an interest rate of 7 percent and annual payments of $14,238 due on the last day of the year. 4. On January 1, Year 10, issued $50,000 of 6 percent, five year bonds. The bonds were issued at 98. 5. Purchase $660 of supplies on account. 6. Purchased 170 alarm systems at a cost of $300. Cash was paid for the purchase. 7. After numerous attempts to collect from customers, wrote off $2,450 of uncollectible accounts receivable. 8. Sold 160 alarm systems for $580 each plus sales tax of 5 percent. All sales were on account. (Be sure to compute cost of goods sold using the FIFO cost flow method) 9. Record the cost of goods sold related to the sale from Event 8 using the FIFO method. 10. Billed $120,000 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 $84,000 were sales on account. Sales tax is not charged on this service. 11. Replenished the petty cash fund on June 30. The fund had $11 cash and receipts of $65 for yard mowing and $24 for office supplies expense. 12. Collected the amount due from the credit card company. 13. Paid the sales tax collected on $85,000 of the alarm sales. 14. Collected $167,000 of accounts receivable during the year. 15. Paid installers and other employees a total of $82,000 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 $9,600. The net amount of salaries was paid in cash 16. Paid $1,250 in warranty repairs during the year. 17. On September 1, paid the note and interest owed to State Bank 18. Paid $18,000 of advertising expense during the year. 19. Paid $5,600 of utilities expense for the year 20. Paid the payroll liabilities, both the amounts withheld from the salaries plus the employer share of Social Security tax and Medicare tax, on $75,000 of the salaries plus $8,600 of the federal income tax that was withheld. (Disregard unemployment taxes in this entry) 21. Paid the accounts payable 22. Paid bond interest and amortized the discount. 23. Paid the annual instaliment on the amortized note. 24. Paid a dividend of $10,000 to the shareholders. Adjustments Adjustments 25. There was $210 of supplies on hand at the end of the year. 26. Recognized the expired rent for the office building for the year. 27. Recognized the uncollectible accounts expense for the year using the allowance method. Pacilio now estimates that 1.5 percent of sales on account will not be collected. 28. Recognized depreciation expense on the equipment, van, and building. 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 building has a 40-year life and a $10,000 salvage value. The company uses double-declining-balance for the van and straight-line for the equipment and the building. The equipment and van were purchased in Year 8 and a full year of depreciation was taken for both in Year 8. 29. The alarms systems sold in transaction 8 were covered with a one-year warranty. Pacillo estimated that the warranty cost would be 2 percent of alarm sales. 30. 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 4.5 percent and gross wages for all employees exceeded $7,000. 31. Recognized the employer Social Security and Medicare payroll tax that has not been paid on $7,000 of salaries expense. Requirement General General Journal Ledger Trial Balance Income Statement Changes in Stockholders Equity Balance Sheet Statement of Cash Flow Analysis Prepare the journal entries to record transactions (1) through (24). Then prepare the necessary adjusting entries (25) through (31) to correctly report net income for the period. Then record the closing entries (32) through (34) as of December 31, Year 10. Note: If no entry is required for a transaction, select "No journal entry required" in the first account field. Round final answers to the nearest whole dollars. View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 34 Paid the sales tax payable from Year 9. Note: Enter debits before credits. Date December 31 General Journal Debit Credit Record entry Clear entry View general journal Unadjusted General Ledger Account Cash No. Date Debit Credit Balance No. Date Petty cash Debit Credit Balance January 01 122,475 January 01 100 Accounts receivable No. Date Debit January 01 Credit Balance No. Date 27,400 Jan 01 Merchandise Inventory No. Date Debit Jan 01 Allowance for doubtful accounts Debit Credit Balance 4,390 Supplies Credit Balance No. Date Debit Credit Balance 11,020 January 01 165 No. Date January 01 Prepaid rent Debit Van Credit Balance No. 3,000 Date January 01 Debit Credit Balance 27,000 Equipment No. Date Debit Credit Balance No. January 01 9.000 Date January 01 Accumulated depreciation Debit Credit Balance 23,050 No. Date Interest payable Debit Credit Balance No. Date Warranty payable Debit Credit Balance January 011 320 January 01 312 Unemployment tax payable Sales tax payable Credit Balance No. Date Debit Credit Balance 630 January 01 290 No. Date January 01 Debit Federal income tax payable FICA-Medicare tax payable No. Date Debit Credit Balance No. January 01 500 Date January 01 Debit Credit Balance 150 FICA-Social security fax Payable No. Date Debit Credit Balance No. January 01 600 Date January 01 Notes payable Debit Credit Balance 12,000 Common stock No. Date January 01 Debit Credit Balance 50,000 No. Date January 01 Retained earnings Debit Credit Balance 107,918 < Prev 8 of 9 31. Recognized the employer Social Security and Medicare payroll tax that has not been paid on $7,000 of salaries expense. Requirement General Journal General Ledger Trial Balance Income Statement Changes in Stockholders Equity Balance Sheet Statement of Cash Flow Analysis The ending balance values from the General Ledger tab flows through to the Trial Balance below. The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. (Note: The year shown in the heading represents Year 10 from the problem.) Unadjusted Cash Petty cash Accounts receivable Allowance for doubtful accounts Merchandise inventory Supplies Prepaid rent Van Equipment Accumulated depreciation Interest payable Warranty payable Unemployment tax payable Sales tax payable Federal income tax payable FICA-Medicare tax payable FICA-Social security tax Payable Notes payable Common stock Retained earnings Total Pacilio Security Services, Incorporated Post-Closing Trial Balance December 31, 2023 Account Title Debit Credit $ 122,475 100 27,400) 4,390 11,020 165 3,000 27,000 9,000 23,050 320 312 630 290 500 150 600 12,000 50,000 107,918 S 200,160 $ 200,160 Journal Ledger Statement Equity Sheet of Cash Flow Choose the appropriate accounts to be reported on the income statement. The unadjusted, adjuste will appear for each account, based on your selection. Unadjusted Revenues Total Revenues Expenses Pacilio Security Services, Incorporated Income Statement For the Year Ended December 31, Year 10 Total Operating Expenses Net Operating Income Non-Operating Expense $ Unadjusted Pacilio Security Services, Incorporated Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 10 Beginning Common Stock Add: Common stock issued Ending Common Stock Beginning Retained Earnings Ending Retained Earnings Total Stockholders' Equity Pacilio Security Services, Incorporated Balance Sheet At December 31, Year 10 Assets Liabilities Stockholders' Equity General Requirement Journal General Ledger Trial Balance Income Statement Changes in Stockholders Equity Balance Sheet Statement of Cash Flow Analysis Prepare the statement of cash flow for year ended December 31, Year 10. Note: Amounts to be deducted should be indicated with a minus sign. Pacilio Security Services, Incorporated Statement of Cash Flows For the Year Ended December 31, Year 10 Cash flows from operating activities: Net cash flow from operating activities Cash flows from investing activities: $ 0 Net Cash Flow from Investing Activities Cash flows from financing activities: Net cash flow from financing activities Ending cash balance 0 0 < Balance Sheet Analysis > Pacilio Security Services, Incorporated Effect of Transactions on Financial Statements - Year 10 Balance Sheet Income Statement Transaction Assets Liabilities + Stockholders' Equity Revenue Expenses = Net Income Statement of Cash Flows OA 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. < Statement of Cash Flow Analysis