The trial balance of Pacilio Security Services, Incorporated as of January 1, Year 7, had the following normal balances:

Cash	$ 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, Pacilio Security Services experienced the following transactions:

Paid the salaries payable from Year 6.

Paid $4,800 on March 1, Year 7, for one years lease in advance on the company van.

Paid $8,400 on May 2, Year 7, for one years office rent in advance.

Purchased $550 of supplies on account.

Paid cash to purchase 105 alarm systems at a cost of $285 each.

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.

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.

Sold 110 alarm systems for $63,800. All sales were on account.

Record the cost of goods sold related to the sale from Event 8 using the FIFO method.

Paid the balance of the accounts payable.

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. Pacilio accepted credit cards for $24,000 of this amount. The other $44,000 was sales on account.

On July 1, Year 7, Pacilio 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.

Collected the amount due from the credit card company.

Paid installers and other employees a total of $45,000 cash for salaries.

Collected $116,800 of accounts receivable during the year.

Paid $9,500 of advertising expense during the year.

Paid $5,200 of utilities expense for the year.

Paid a dividend of $20,000 to the shareholders.

Adjustments

There was $250 of supplies on hand at the end of the year.

Recognized the expired rent for both the van and the office for the year.

Recognized the uncollectible accounts expense for the year using the allowance method.

Accrued salaries at December 31, Year 7, were $2,100.

\begin{tabular}{|l|l|l|} \hline \multicolumn{2}{|c|}{ Pacilio Security Services, Inc. } \\ \hline \multicolumn{2}{|c|}{ Income Statement } \\ \hline For the Year Ended December 31, Year 7 & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Tovenues & & \\ \hline & & \\ \hline & & \\ \hline Expenses & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline \multicolumn{2}{|c|}{ Pacilio Security Services, Inc. } \\ \hline \multicolumn{2}{|c|}{ Income Statement } \\ \hline For the Year Ended December 31, Year 7 & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Tovenues & & \\ \hline & & \\ \hline & & \\ \hline Expenses & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular}