Question

The trial balance of Pacilio Security Services, Inc. as of January 1, Year 6, had the following normal balances: Cash Accounts Receivable Supplies Prepaid Rent Merchandise Inventory (24 @ $265; 1 @ $260) Land Accounts Payable Unearned Revenue Salaries Payable Common Stock Retained Earnings $ 74,210 13,500 200 3,200 6,620 4,000 1,950 900 1,000 50,000 47,880 During Year 6, Pacilio Security Services experienced the following transactions: 1. Paid the salaries payable from Year 5. 2. On March 1, Year 6, Pacilio established a $100 petty cash fund to handle small expenditures. 3. Paid $4,800 on March 1, Year 6, for a one-year lease on the company van in advance. 4. Paid $7,200 on May 2, Year 6, for one year's office rent in advance. 5. Purchased $400 of supplies on account. 6. Purchased 100 alarm systems for $28,000 cash during the year. 7. Sold 102 alarm systems for $57,120. All sales were on account. 8. Record the cost of goods sold related to the sale from Event 7 using the FIFO method. 9. Paid $2,100 on accounts payable during the year. 10. Replenished the petty cash fund on August 1. At this time, the petty cash fund had only $7 of currency left. It contained the following receipts: office supplies expense, $23; cutting grass, $55; and miscellaneous expense, $14. 11. Billed $52,000 of monitoring services for the year. 12. Paid installers and other employees a total of $25,000 cash for salaries. 13. Collected $89,300 of accounts receivable during the year. 14. Paid $3,600 of advertising expense during the year. 15. Paid $2,500 of utilities expense for the year. 16. Paid a dividend of $10,000 to the shareholders. Adjustment 17. There was $160 of supplies on hand at the end of the year. 18. Recognized the expired rent for both the van and the office building for the year. (The rent for both the van and the office remained the same for Year 5 and Year 6.) 19. Recognized the balance of the revenue earned in Year 6 where cash had been collected in Year 5. CO. Accrued salaries at December 31, Year 6, were $1,400. The following information is available for the bank reconciliation: (1) Checks written but not paid by the bank, $8,350. (2) A deposit of $6,500 made on December 31, Year 6, had been recorded but was not shown on the bank statement. (3) A debit memo for $55 for a new supply of checks. (Hint: Use Office Supplies Expense account.) (4) A credit memo for $30 for interest earned on the checking account. (5) An NSF check for $120. (6) The balance shown on the bank statement was $80,822 21. Recorded any debit memos or checks not included on books as part of the bank reconciliation. -2. Recorded any credit memos or interest received not included on books as part of the bank reconciliation.

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will ge Analysis: Liabilities SEquity Event Cash Flow Assets Revenue Expense net Income 1 OA 2 3 OA 4 OA 5 + 6 OA 7 OA 10 OA 11 12. OA 13 OA 14 OA 15 OA 16 FA 17 18 19 + 20 21 OA 22 OA +

Please hit LIKE button if this helped. For any further explanation, please put y Account Date Debit Credit Salaries Payable $1,000 $ 1,000 Cash $ Petty Cash Mar1 100 Cash $ 100 $ 4,800 Mar1 Prepaid Lease $ 4,800 Cash $ 7,200 Prepaid Rent May 2 $7,200 Cash $ Supplies 5 400 Accounts Payable $ 400 $28,000 Merchandise Inventory 6 $ 28,000 Cash $57,120 7 Accounts Receivable $57,120 Sales $ 28,180 Cost of Goods Sold 8 Merchandise Inventory $28,180 24 265 1*260 77*280 9 Accounts Payable $2,100 Cash 2,100 10 Office Supplies Expense $ 23 $ Cutting Expense 55 Miscellaneous Expenses $ 14 Cash Short/Over 1 Cash $ 93 11 $52,000 Accounts Receivable $ 52,000 Service Revenue $25,000 Salaries Expense 12 $25,000 Cash $ 89,300 Cash 13 $ 89,300 Accounts Receivable 14 $3,600 Advertising Expense $3,600 Cash

$ 2,500 Utilities Expense 15 $ 2,500 Cash $10,000 Dividends 16 $10,000 Cash Adjusting $ Dec 31 Supplies Expenses 440 $ Supplies 440 (200+400-160) 4800/12* Lease Expense 4,000 $ 7,200 Rent Expense $ 4,000 $ 7,200 Prepaid Lease Prepaid Rent Unearned Revenue Dec 31 900 Service Revenue 900 $ 1,400 Dec 31 Salaries Expense $ 1,400 Salaries Payable

Beginning Final Year 6 Trx Debit Credit Debit Credit Credit Debit Accounts $ 78,973 $ $ Cash 74,210 4,763 $ $ Petty Cash Merchandise Inventory 100 100 $ $ 180 $ 6,620 6,440 $ $ $33,440 Accounts Receivable 13,500 19,940 $ $ 3,200 Prepaid Rent 3,200 $ 800 Prepaid Lease 800 $ $ 40 $ Supplies 200 160 $ $ Land 4,000 4,000 Accounts Payable $ $ 1,950 $ 1,700 250 Salaries Payable $ 1,000 400 1,400 Unearned Revenue $ 900 $ $ 900 $50,000 Common Stock 50,000 Retained Earning $ $47,880 47,880 $ $10,000 Dividends 10,000 $ 57,120 $ 52,900 $ 57,120 $ 52,900 Sales Service Revenue $ Interest Income 30 30 $ 28,180 $ 28,180 Cost of Goods Sold $ Cutting Expense 55 55 $ $ Advertising Expense 3,600 3,600 $ $ Lease Expense 4,000 4,000 $ Rent Expense 7,200 7,200 Miscellaneous Expenses $ $ 14 14 Office Supplies expense $ 78 78 $ 26,400 $ Salaries Expense 26,400 $ $ Supplies Expenses 440 440 $ $ Utilities Expense 2,500 2,500 101,730$ 110,670 110,670 209,580 $ 209,580 Total 101,730 $ a. Income Statement: $ Sales Revenue 57,120 52,900 $ $ Service Revenue Total Revenue 110,020 Less: Cost of Goods Sold 28,180 Gross Margin 81,840 Less: Operating Expenses: $ Cutting Expense Advertising Expense 55 $ 3,600 $ Lease Expense 4,000 $ Rent Expense Miscellaneous Expenses 7,200 $ 14 Office Supplies expense $ 78 $ Salaries Expense 26,400 $ Supplies Expenses 440 Utilities Expense 2,500 $ 44,287 $ Operating Income 37,553 $ Add: Interest Revenue 30 $ 37,583 Net Income

b.Statement of change in Equity: Common Stock A 50,000 Retained Earning, beginning balance 47,880 $ Less: Net Income 37,583 Less: Dividend -10,000 Retained Earning, ending balance $ В 75,463 Total Equity 125,463 c. Balance Sheet Assets Current Assets: $ Cash 78,973 Petty Cash Merchandise Inventory 100 $ 6,440 Accounts Receivable 33,440 $ Prepaid Rent 3,200 Prepaid Lease 800 Supplies 160 Total Current Assets 123,113 $ Land 4,000 $ Land 4,000 Total Assets 127,113 Liabilities Current Liabilities: Accounts Payable $ 250 Salaries Payable 1,400 $ Total Current Liabilities 1,650 Total Liabilities $ 1,650 Stockholder's Equity: $ Common Share 50,000 Retained Earning 75,463 Total Stockholder's Equity Total Liabilities and Stockholder's Equity 125,463 $ 127,113 $