Question

OBLEM The trial balance of Pacilio Security Services Inc. as of January 1, 2015, had the following mal balances: Cash Accounts receivable Supplies Prepaid rent Merchandise inventory 19 @ 5240) Land Accounts payable Salaries payable Common stock Retained earnings S62,860 20,500 150 2,000 2,160 4,000 980 1,500 50,000 39,190 During 2015 Pacile Security Services experienced the following transactions

Answer 1

a.

Pacilio Security Systems Sales and Service General Journal for 2015 Particulars Credit SI.No Debit 1 Salaries Payable Dr. 1,500 To Cash 1,500 2 Merchandise Inventory Dr. 5,000 To Cash 5,000 3 Accounts Payable To Cash 4 Prepaid Rent Dr. 980 980 Dr. 4,800 To Cash 4,800 5 Prepaid Rent 7,200 Dr. To Cash 7,200 6 Supplies Dr. 500 To Cash 500 7 Merchandise Inventory Dr. 6,500 To Cash 6,500 8 Merchandise Inventory To Accounts Payable 9a Cash Accounts Receivable To Sales Revenue 9b|Cost of Goods Sold To Merchandise Inventory Dr. 7,950 7,950 Dr. 11,000 Dr. 22,000 33,000 Dr. 15,250 15,250 10a Sales Revenue Dr. 550 To Cash 10b Merchandise Inventory To Cost of Goods Sold 11 Salaries Expense To Cash 550 Dr. 260 260 Dr. 21,000 21,000 Dr. 12 Accounts Receivable 45,000 45,000 To Service Revenue 13 Cash Dr. 1,200 To Unearned Revenue 1,200 14 Cash Dr. 74,000 To Accounts Receivable 74,000 15 Accounts Payable Dr. 6,000 To Cash 6,000 16 Advertising Expense To Cash 17 Utilities Expense Dr. 3,500 3,500 Dr. 2,320 To Cash 2,320 18 Dividends Dr. 15,000 To Cash 15,000 19 Supplies Expense To Supplies 20a Rent Expense Dr. 200 200 6,800 Dr. To Prepaid Rent 20b Rent Expense 6,800 Dr. 4,000 To Prepaid Rent 21 Unearned Revenue 4,000 Dr. 300 To Service Revenue 300 22 Salaries Expense To Salaries Payable Dr. 1,000 1,000

b.

Pacilio Security Systems Sales and Service T-Accounts for 2015 Stockholders' Equity Liabilities Assets Common Stock Cash 62,860 11,000 1,500 50,000 50,000 50,000 5,000 1,200 74,000 50,000 980 Salaries Payable 1,500 1,000 1,000 Accounts Payable 980 4,800 1,500 7,200 Retained Earnings 39,190 39,190 39,190 500 6,500 39,190 550 980 21,000 6,000 3,500 2,320 6,000 7,950 6,980 1,950 6,980 Service Revenue 45,000 15,000 149,060 300 45,300 149,060 74,210 45,300 45,300 Unearned Revenue 1,200 1,200 900 300 1,200 Land Sales Revenue 33,000 33,000 32,450 4,000 4,000 4,000 550 33,000 4,000

  

Advertising Expense 3,500 3,500 3,500 Accounts Recievable 74,000 20,500 22,000 45,000 87,500 13,500 3500 87,500 Salaries Expense 21,000 1,000 22,000 Supplies 22,000 150 200 500 22,000 650 650 450 Prepaid Rent 2,000 7,200 4,800 14,000 3,200 Merchandise Inventory 2,160 5,000 6,500 7,950 Cost of Goods Sold 6,800 4,000 15,250 15,250 14,990 260 15,250 14,000 Dividends 15,000 15,000 15000 15,250 15,000 Supplies Expense 200 260 200 200 21,870 21,870 200 6,620 Rent Expense 6,800 4,000 10,800 10,800 Utilities Expense 2,320 2,320 2,320 10,800 2,320

c.

Pacilio Security Systems Sales and Service Trial Balance December 31, 2015 Cash 74,210 Merchandise Inventory 6,620 4,000 Land 13,500 Accounts Recievable Supplies Prepaid Rent Accounts Payable Salaries Payable 450 3,200 1,950 1,000 Unearned Revenue 900 50,000 Common Stock 39, 190 Retained Earnings Dividends 15,000 Sales Revenue 32,450 45,300 Service Revenue Salaries Expense Rent Expense Supplies Expense Advertising Expense 22,000 10,800 200 3,500 Cost of Goods Sold 14,990 Utilities Expense 2,320 170,790 Totals 170,790

d.
Pacilio Security Systems Sales and Service Income Statement For the Year Ended December 31, 2015 Sales Revenue 32,450 Add: Service Revenue 45,300 77,750 Net Sales 14,990 Less: Cost of Goods Sold Gross Margin 62,760 Less: Operating Expenses Rent Expense Supplies Expense Advertising Expense Salaries Expense Utilities Expense Total Expenses 10,800 200 3,500 22,000 2,320 38,820 Net Income (Gross Margin-Total Expenses) 23,940

Pacilio Security Systems Sales and Service Statement of Changes in Stockholders' Equity For the Year Ended December 31, 2015 Beginning Common Stock 50,000 Add: Stock Issued Ending Common Stock 50,000 Beginning Retained Earnings 39,190 Add: Net Income 23,940 Less: Dividends 15,000 Ending Retained Earnings 48,130 Total Stockholders' Equity 98,130

Pacilio Security Systems Sales and Service Balance Sheet As of December 31, 2015 Assets 74,210 6,620 4,000 Cash Merchandise Inventory Land Accounts Recievable 13,500 Supplies Prepaid Rent Total Assets 450 3,200 101,980 Liabilities Salaries Payable Accounts Payable 1,000 1,950 Unearned Revenue 900 Total Liabilities 3,850 Stockholders' Equity Common Stock 50,000 48,130 Retained Earnings Total Stockholders' Equity 98,130 Total Liabilities and Stockholders' Equity 101,980