Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The trial balance of Pacilio Security Services, Incorporated as of January 1 , Year 8 , had the following normal balances: Cash $ 9 3

The trial balance of Pacilio Security Services, Incorporated as of January 1, Year 8, had the following normal balances:
Cash $93,708
Petty cash 100
Accounts receivable 22,540
Allowance for doubtful accounts 1,334
Supplies 250
Prepaid rent 3,600
Merchandise inventory (18 @ $285)5,130
Land 4,000
Salaries payable 2,100
Common stock 50,000
Retained earnings 75,894
During Year 8, Pacilio Security Services experienced the following transactions:
Paid the salaries payable from Year 7.
Purchased equipment and a van for a lump sum of $36,000 cash on January 2, Year 8. The equipment was appraised for $10,000 and the van was appraised for $30,000.
Paid $9,000 on May 1, Year 8, for one years office rent in advance.
Purchased $300 of supplies on account.
Purchased 120 alarm systems at a cost of $280 each. Paid cash for the purchase.
After numerous attempts to collect from customers, wrote off $2,350 of uncollectible accounts receivable.
Sold 115 alarm systems for $580 each. All sales were on account.
Record the cost of goods sold related to the sale from Event 7 using the FIFO method.
Billed $86,000 of monitoring services for the year. Credit card sales amounted to $36,000, and the credit card company charged a 4 percent fee. The remaining $50,000 were sales on account.
Replenished the petty cash fund on June 30. The fund had $12 cash and receipts of $45 for yard mowing, $28 for office supplies expense, and $11 for miscellaneous expenses.
Collected the amount due from the credit card company.
Paid installers and other employees a total of $52,000 cash for salaries.
Collected $115,500 of accounts receivable during the year.
Paid $12,500 of advertising expense during the year.
Paid $6,800 of utilities expense for the year.
Sold the land, which was purchased in 2011, for $12,000.
Paid the accounts payable.
Paid a dividend of $10,000 to the shareholders.
Adjustments
Determined that $180 of supplies were on hand at the end of the year.
Recognized the expired rent for both the old van and the office building for the year. The lease on the van was not renewed. Rent paid on March 1, Year 7, for the van was $4,800.
Recognized uncollectible accounts expense for the year using the allowance method. Pacilio estimates that 3 percent of sales on account will not be collected.
Recognized depreciation expense on the equipment and the van. The equipment has a five-year life and a $2,000 salvage value. The van has a four-year life and a $6,000 salvage value. The company uses double-declining-balance for the van and straight-line for the equipment.
Accrued salaries at December 31, Year 8, were $1,500.for the equipment.
23. Accrued salaries at December 31, Year 8, were $1,500.
\table[[Requirement,\table[[General],[Journal]],\table[[General],[Ledger]],Trial Balance,\table[[Income],[Statement]],\table[[Changes in],[SE]],\table[[Balance],[Sheet]],\table[[Statement],[of CF]],Analysis]]
Indicate whether the transaction increases (+), decreases (-), or increases and decreases (+/-) for each element of the financial statements in the Cash Flow column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity. The first transa is recorded as an example.
\table[[Pacilio Security Services, Incorporated],[Effect of Transactions on Financial Statements - Year 8],[Transaction,Balance Sheet,Income Statement,{
\table[[Statement of Cash],[Flows]]}],[Assets,= Liabilities,,\table[[Stockholders'],[Equity]],Revenue,- Expenses {fcf5c77ca-b72b-41ee-8532-50d97c04c8d8}
\table[[Net],[Income]]],[1.,-,E,,,,,E,OA
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting

Authors: Jawahar Lal, Seema Srivastav

6th Edition

9353168384, 978-9353168384

More Books

Students also viewed these Accounting questions

Question

How would you train others to perform the task? Explain.

Answered: 1 week ago

Question

Why is it important for a firm to conduct career development?

Answered: 1 week ago