The trial balance of Pacilio Security Services, Incorporated as of January 1, Year 7, had the following normal balances: Canh $ 78,972 Petty cash 100 Accounts Receivable 33,440 Supplies 160 Prepaid Rent 3,200 Merchandise Inventory (23 $280) 6,440 Land 4,000 Accounts Payable 250 Salaries Payable 1.400 Common Stock 50,000 Retained Earnings 74,662 During Year 7. Pacilo Security Services experienced the following transactions: 1. Paid the salaries payable from Year 6. 2. Pald $4,800 on March 1, Year 7, for one year's lease in advance on the company van. 3. Pald $8,400 on May 2, Year 7. for one year's office rent in advance. 4. Purchased $550 of supplies on account. 5. Paid cash to purchase 105 alarm systems at a cost of $285 each 6. Pacilio has noticed its accounts receivable balance is growing more than desired and some collection problems exist. It appears that uncollectible accounts expense is approximately 3 percent of total credit sales. Pacilio has decided it will starting this year, adopt the allowance method of accounting for uncollectible accounts. It will record an adjusting entry to recognize the estimate at the end of the year 7. in trying to collect several of its delinquent accounts, Pacilio has learned that these customers have either declared bankruptcy or moved and left no forwarding address. These uncollectible accounts amount to $1,900 8. Sold 110 alarm systems for $63,800. All sales were on account. 9. Record the cost of goods sold related to the sale from Event 8 using the FIFO method 10. Paid the balance of the accounts payable. 11. Pacilio began accepting credit cards for some of its monitoring service sales. The credit card company charges a fee of 4 percent Total monitoring services for the year were $68,000. Pacilo accepted credit cards for $24,000 of this amount. The other $44.000 was sales on account 12. On July 1 Year 7. Pocillo replenished the petty cash fund. The fund contained $21 of currency and receipts of $50 for yard mowing, $22 for office supplies expense, and $9 for miscellaneous expenses 13. Collected the amount due from the credit card company. 14. Paid Installers and other employees a total of $45,000 cash for salaries. 15. Collected $116,800 of accounts receivable during the year. 16. Paid $9,500 of advertising expense during the year. 17. Paid $5,200 of utilities expense for the year. 18. Pald a dividend of $20,000 to the shareholders. Adjustments 19. There was $250 of supplies on hand at the end of the year 20. Recognized the expired rent for both the van and the office for the year 21. Recognized the uncollectible accounts expense for the year using the allowance method. 22. Accrued salaries at December 31, Year 7, were $2,100. Pacilio Security Services, Inc. Income Statement For the Year Ended December 31, Year 7 Revenues Total Revenues 0 Expenses