Question
The trial bala nce of Pac ilio Sec urit y Services I nc. as of Ja nua ry I. 2014, had the follow ing nor
The trial bala nce of Pac ilio Sec urit y Services I nc. as of Ja nua ry I. 2014, had the follow ing nor mal balances: Cash Accounts Receivable Supplies Prepaid Rent Land UnearnedRevenue Salaries Payable Common Stock Retained Earnings $12,500 3,500 120 1,000 4,000 900 1,000 8,000 11,220 In 201 4 , Pac ilio S e c urit y Se rvices d ec id e d to expa nd its busin ess to se ll sec ur i ty s ystem s a nd offer 24-ho ur ala r m monit o ring se rvices. I t p la ns to phase out it s c ur rent se rvice of pro vid ing sec u rit y perso nn el a t va rio us eve nts. T he follow ing s umm a ry tra nsac tio ns occ urr ed d urin g 201 4 . 1. Paid the sala ries payable fro m 20 1 3. 2. Acq uire d a n additi o na l $ 4 2,000 cas h fro m the iss ue of co mm on stock. 3. Rent ed a la rger build ing o n May I: paid $6,000 for 12 mo nth s' rent in adva nce. 4. Pa id $800 cas h for sup pl ies to be used over the next several months by the business. 5. Pu rchased 50 ala rm systems for resale a t a cos t of S12,000. T he alarm sys tems were pur chased on acco unt with the te rms 2/ I0, n/ 30. 6. Re tu rned one of the ala rm systems tha t had a cost of S240. 7. Insta lled 40 ala rm systems d urin g the year for a to tal sales amo unt of $20,000. T he cost of these sys tems a moun ted to $9 ,440. $ 15,000 o f the sales were on a cco unt a nd $5,000 were cash sales. 8. Paid the insta llers a nd other employees a tota l of $9,500 in sa la ries. 9. So ld $36,000 of monit o rin g se rvices for the year. T he services are billed to the custo mers each month. 10. Pa id c a s h o n acco unt s payable. T he payme nt was made before the disco un t perio d ex pire d. At th e time of purc hase. the in ventory had a cost of $8.000. 1I. Pa id cas h to sett le additio na l acco un ts payab le. T h e p a yment was made after the disco un t period expired. At the ti me of purchase. the inven tory had a cos t of S2,780. 12. Co llected $43.000 of accounts receivable d urin g the yea r. 13. Pe rformed SI2 ,000 of sec ur it y se r vices for area events; S9,000 was on acco unt and $3,000 was for cas h. 14. Pa id ad vertising cost of $ 1,620 for the year. 15. Pa id $1,100 for utilities expe nse for the yea r. I 6. Pa id a dividend of $12,000 to th e sha reho ld e rs. Adjustment Information 17. Supp lies o f $150 were o n hand at the end of the yea r. 18. Recog nize d the e xpi red rent for the yea r. 19. Recog nize d the balance of the unea rned revenue; cash was received in 20I 3. 20. Accrued sala rie s at D ece mbe r 31, 2014 , were $ 1.500. Required a. Reco rd th e above tra nsa ctio ns in ge ne ra l jo urnal form . ( Ro und amount s to th e nea res t dolla r.) b. Post the tra nsactio ns to T- acco unts. c. Prepa re a trial ba lance. d. Prepa re an inco me sta tement, stateme nt of cha nges i n s toc kho ld e rs' e quity, ba la nce shee t, and stateme nt of cas h nows. e. Close the tempo rary acco unt s to re ta in ed ea rnings. f. Post the cl os i ng entr ies to the T-acco unt s and prepare a post-closing trial bala nce I
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