The trial balance of Pacilio Security Services, Incorporated as of January 1, Year 4, had the following normal balances. Cash Accounts Receivable Supplies Prepaid Rent Land Unearned Revenue Salaries Payable Common Stock Retained Earnings $ 12,500 3,500 120 1,000 4,000 900 1,000 8,000 11,220 In Year 4, Pacilio Security Services decided to expand its business to sell security systems and offer 24-hour alarm monitoring services. It plans to phase out its current service of providing security personnel at various events. The following summary transactions occurred during Year 4: 1. Paid the salaries payable from Year 3. 2. Acquired an additional $42,000 cash from the issue of common stock. 3. Rented a larger building on May 1; paid $6,000 for 12 months' rent in advance. 4. Paid $800 cash for supplies to be used over the next several months by the business. 5. Purchased alarm systems for resale at a cost of $12,000. The alarm systems were purchased on account with the terms 2/10, n/30. 6. Returned alarm systems that had a cost of $240. 7. Installed alarm systems during the year for a total sales amount of $20,000. Sales of $15,000 were on account, while $5,000 were cash sales. 8. The cost of the systems sold in Event 7 amounted to $9,440. 9. Paid the installers and other employees a total of $9,500 in salaries. 10. Sold $36,000 of monitoring services for the year. The services are billed to the customers each month. 11. Paid cash on accounts payable. The payment was made before the discount period expired. At the time of purchase, the inventory has a cost of $8 000 12. Paid cash to settle additional accounts payable in the amount of $2,780. The payment was made after the discount period expired. 13. Collected $43,000 of accounts receivable during the year. 14. Performed $12,000 of security services for area events; $9,000 was on account and $3,000 was for cash. 15. Paid advertising cost of $1,620 for the year. 16. Paid $1,100 for utilities expense for the year. 17. Paid a dividend of $12,000 to the shareholders. Adjustment Information 18. Supplies of $150 were on hand at the end of the year. 19. Recognized the expired rent for the year. 20. Recognized the balance of the unearned revenue; cash was received in Year 3. 21. Accrued salaries at December 31, Year 4, were $1,500. Requirement General Journal General Ledger Trial Balance Income Statement Changes in SE Balance Sheet Statement of CF Analysis Requirement General Journal General Ledger Income Trial Balance Statement Changes in SE Balance Sheet Statement of CF Analysis Prepare the journal entries to record transactions (1) through (17). Then prepare the necessary adjusting entries (18) through (21) to correctly report net income for the period. Then record the closing entries (22) through (24) as of December 31, Year 4. (If no entry is required for a transaction, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Paid the salaries payable from Year 3. Note: Enter debits before credits. Date General Journal Debit Credit Jan 02 General Ledger Account Cash Accounts receivable Debit Credit No. Debit Credit No. Date Jan 01 Balance 12,500 Date Jan 01 Balance 3,500 Supplies Debit Prepaid rent Debit No. Date Credit No. Credit Balance 120 Date Jan 01 Balance 1,000 Jan 01 Salaries payable Land Debit No. Date Credit No. Debit Credit Balance 4,000 Date Jan 01 Balance 1,000 Jan 01 Unearned revenue Common stock Debit Credit No. Debit Credit No. Date Jan 01 Balance 900 Date Jan 01 Balance 8,000 Retained earnings No. Date Debit Credit Balance 11,220 Jan 01 PACILIO SECURITY SERVICES, INCORPORATED Income Statement For the Year Ended December 31, Year 4 Revenues Total Revenues Expenses Total Expenses PACILIO SECURITY SERVICES, INCORPORATED Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 4 Beginning Common Stock Ending Common Stock Beginning Retained Earnings Ending Retained Earnings Total Stockholders' Equity PACILIO SECURITY SERVICES, INCORPORATED Balance Sheet At December 31, Year 4 Assets Liabilities Stockholders' Equity PACILIO SECURITY SERVICES, INCORPORATED Statement of Cash Flows For the Year Ended December 31, Year 4 Cash flows from operating activities: Net cash flow from operating activities Cash flows from investing activities: Net cash flow from investing activities Cash flows from financing activities: Net cash flow from financing activities Ending cash balance PACILIO SECURITY SERVICES, INCORPORATED Effect of Transactions on Financial Statements - Year 4 Balance Sheet Income Statement = Liabilities + Stockholders' Net Revenue Expenses Equity Income Statement of Cash Flows Transaction Assets 1. 2. 3. 4. 5. 6. 7. 8. 9. 10 11. 12. 13. 14. 15 16 17. 18 19. 20. 21