The trial balance of Pacilio Security Services, Inc. as of January 1, Year 11, had the following normal balances: Cash Petty cash Accounts receivable Allowance for doubtful accounts Supplies Merchandise inventory (48 e $300) Equipment Van Building Accumulated depreciation Land Sales tax payable Employee income tax payablo FICA-Social Security tax payable FICA-Medicare tax payable Warranty payable Unemployment tax payable Notes payable-Building Bonds payable Discount on bonds payable Common stock Retained earnings $113, 718 100 39,390 4,662 210 14,400 9,000 27,000 125,000 28,075 25,000 390 1,000 840 210 918 945 92,762 50,000 800 50,000 124,816 During Year 11, Pacitio Security Services experienced the following transactions; 1. Paid the sales tax payable from Year 10, 2. Pald the balance of the payroll liabilities due for Year 10 (federal income tax, FICA taxes, and unemployment taxes). 3. Issued 5,000 additional shares of the $5 par value common stock for $8 per share. 4. Issued 1,000 shares of $50 stated value, 5 percent cumulative preferred stock for $52 per share. 5. Purchased $500 of supplies on account. 6. Purchased 190 alarm systems at a cost of $310. Cash was paid for the purchase. 7. After numerous attempts to collect from customers, wrote off $3,670 of uncollectible accounts receivable. 8. Sold 210 alarm systems for $600 each plus sales tax of 5 percent. All sales were on account. 9. Record the cost of goods sold related to the sale from Event 8 using the FIFO method. 10. Billed $125,000 of monitoring services for the year. Credit card sales amounted to $58,000, and the credit card company charged a 4 percent fee. The remaining $67,000 were sales on account Sales tax is not charged on this service. 11. Replenished the petty cash fund on June 30. The fund had $10 cash and receipts of $75 for yard mowing and $15 for office supplies expense 12. Collected the amount due from the credit card company, 13. Paid the sales tax collected on $105,000 of the alarm sales. 14. Collected $198,000 of accounts receivable during the year. 15. Pald Installers and other employees a total of $96,000 for salaries for the year. Assume the Social Security tax rate is 6 percent and the Medicare tax rate is 15 percent. Federal income taxes withheld amounted to $10,600. No employee exceeded $110,000 in total wages. The net salaries were paid in cash. 16. On October 1, declared a dividend on the preferred stock and a $1 per share dividend on the common stock to be paid to shareholders of record on October 15, payable on November 1, Year 11 17. Paid $1,625 in warranty repairs during the year. 18. On November 1, Year 11, pald the dividends that had been previously declared. 19. Pald $18,500 of advertising expense during the year. 20. Pald $6,100 of utilities expense for the year. 21. Pald $9,200 of the Employee Income Tax Payable, $5,280 of the FICA Tax - Soc. Sec. Tox Payable and $1,320 of the FICA Tox - Medicare Tax Payable. Also, pald the Payroll Tax Expense for the 75% employer matching of FICA taxes on $88,000 of salaries. 22. Pold the accounts payable. 23. Pald bond interest and amortized the discount. The bond was issued in Year 10 and pays interest at 6 percent. 24. Paid the annual installment of $14,238 on the amortized note. The interest rate for the note is 7 percent Post-closing Pacilio Security Services, Inc. Incomo Statoment For the Year Ended December 31, Year 11 Revenues Total Revenues Expenses Total Operating Expenses Net Operating Income Non-Operating Items $ 0 Pacilio Security Services, Inc. Balance Sheet At December 31, Year 11 Assets 0 0 Liabilities 0 $ 0 Stockholders' Equity Total Pald-in Capital 0 161,040 161,040 161,040 Total Liabilities and Stockholders' Equity $ Pacilio Security Services, Inc. Statement of Cash Flows For the Year Ended December 31, Year 11 Cash flows from operating activities: $ 0 Net cash flow from operating activities Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: 0 Net cash flow from financing activities Ending cash balance $ Pacilio Security Services, Inc. Effect of Transactions on Financial Statements - Year 11 Balance Sheet Income Statement Not - Liabilities 4 S. Equity Revenue Expenses Income Statement of Cash Flows Transaction Assets 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 Date General Journal Credit Debit 390 1 Dec 31 Sales tax payable Cash 390 2 Dec 31 Employee income tax payable FICA - Social security tax payable FICA - Medicare tax payable Cash 1,000 840 210 2,995 3 Dec 31 40,000 Cash Common stock Paid-in capital in excess of par value, Common stock 25,000 15,000 4 Dec 31 52,000 Cash Preferred stock Paid-in capital in excess of par value, Preferred stock 50,000 2,000 5 Dec 31 500 Supplies Accounts payable 500 6 Dec 31 Merchandise inventory Cash 58,900 58,900 7 Dec 31 Allowance for doubtful accounts Accounts receivable 3,670 3,670 8 Dec 31 132,300 Accounts receivable Alarm sales Sales tax payable 126,000 6,300 VI 9 Dec 31 Cost of goods sold Merchandise inventory 64,620 64,620 10 Dec 31 55,680 Accounts receivable - Credit card Accounts receivable Credit card expense Monitoring service revenue 67,000 2,320 they 125,000 11 Jun 30 Office supplies expense Maintenance expense Cash 15 75 90 12 Dec 31 55,680 Cash Accounts receivable - Credit card 55,680 13 Dec 31 5,250 Sales tax payable Cash 5,250 14 Dec 31 Cash 198,000 Accounts receivable 198,000 15 Dec 31 96,000 Salaries expense Employee income tax payable FICA - Social security tax payable FICA - Medicare tax payable Cash 10,600 5,760 1.440 78,200 16 Oct 01 Preferred stock Common stock Dividends payable 2,500 15,000 17,500 17 Dec 31 Warranty payable Cash 1,625 1,625 18 Nov 01 Dividends payable Cash 17.500 17.500 19 Dec 31 Advertising expense Cash 18,500 18,500 20 Dec 31 Utilities expense 6,100 Cash 6.100 21 Dec 31 Employee income tax payable FICA - Social security tax payable FICA - Medicare tax payable Payroll tax expense 9.200 5,280 1,320 6,600 Dec 31 Employee income tax payable FICA - Social security tax payablo FICA - Medicare tax payable Payroll tax expense Cash 9,200 5,280 1,320 6,600 22,400 22 Dec 31 500 Accounts payable Cash 500 23 Dec 31 3,200 Interest expenso Discount on bonds payable Cash 200 3,000 P24 Dec 31 Notes payable Interest expense Cash 7,745 6,493 14,238 IS 25 Dec 31 520 Supplies expense Supplies 520 26 Dec 31 1.993 Allowance for doubtful accounts 1,993 27 Dec 31 Depreciation expense Accumulated depreciation 1,400 1,400 28 Dec 31 2,520 Warranty expense Warranty payable 2,520 29 Dec 31 945 Payroll tax expense Unemployment tax payable 945 30 Dec 31 600 Payroll tax expense FICA - Social security tax payable FICA - Medicare tax payable 480 120 31 Dec 31 Alam sales Security service revenue Retained eamings 126,000 125,000 251,000 29 Dec 31 945 Payroll tax expense Unemployment tax payable 945 30 Dec 31 600 Payroll tax expense FICA - Social security tax payable FICA - Medicare tax payable 480 120 31 Dec 31 Alarm sales Security service revenue Retained earings 126,000 125,000 251,000 2 32 Dec 31 214,776 64,620 18,500 2,320 4,275 75 15 Retained earnings Cost of goods sold Advertising expense Credit card expense Depreciation expense Maintenance expense Office supplies expense Payroll tax expense Salaries expense Supplies expense Uncollectible accounts expense Utilities expense Warranty expense Interest expense 8.145 96,000 520 1,993 6,100 2,520 9,693 33 Dec 31 Retained earnings Dividends 17,500 17,500