The trial balance of Pacilio Security Services, Inc. as of January 1, Year 3, had the following normal balances: Cash Accounts Receivable Supplies Prepaid Rent Land $ 8,900 1,500 65 800 4,000 1,050 200 1,200 2,000 Accounts Payable Unearned Revenue Salaries Payable Notes Payable Common Stock Retained Earnings 8,000 2,815 During Year 3, Pacilio Security Services experienced the following transactions: 1. Paid the salaries payable from Year 2 2. Paid the balance of $2,000 on the debt owed to the Small Business Government Agency. The loan is interest-free. 3. Performed $32,000 of security services for numerous local events during the year; $21,000 was on account and $11,000 was for cash. 4. On May 1, paid $3,000 for 12 months' rent in advance. 5. Purchased supplies on account for $700. 6. Paid salaries expense for the year of $9,000. 7. Incurred other operating expenses on account, $4,200. 8. On October 1, Year 3, a customer paid $1,200 for services to be provided over the next 12 months. 9. Collected $19,000 of accounts receivable during the year. 10. Paid $5,950 on accounts payable. 11. Paid $1,800 of advertising expenses for the year. 12. Paid a cash dividend to the shareholders of $4,650. 13. The market value of the land was determined to be $5,500 at December 31, Year 3. Adjustments 14. There was $120 of supplies on hand at the end of the year. 15. Recognized the expired rent. 16. Recognized the earned revenue from Year 2 and transaction no. 8. 17. Accrued salaries were $1,000 at December 31, Year 3. Indicate whether the transaction increases (+), decreases (-), or increases and decreases (+/-) for each element of the financial statements. Also, in the Cash Flow column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity. The first transaction is recorded as an example. Pacilio Security Services, Inc. Effect of Transactions on Financial Statements - Year 3 Balance Sheet Income Statement Liabilities S. Revenue Expenses Equity Statement of Cash Flows Transaction Assets + Net Income = - OA 1. 2. 3. FA > >> >> + + + + > OA x > OA +1 + > + > OA 4. 5. 6. 7. 8. 9. + + + > OA 10. 11 12. 13 14. 15. 16. 17 Choose the appropriate accounts to be reported on the income statement. The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. Post-closing Pacilio Security Services, Inc. Income Statement For the Year Ended December 31, Year 3 Revenues Service revenue Total Revenues Expenses Advertising expense Other operating expense Rent expense Salaries expense Supplies expense Total Expenses Net income