Question

The following transactions took place during 2016 for Palicio Security Service 1. Paid the salaries payable from 2015. 2. On March 1, 2016, Palicio established a $100 petty cash fund to handles expenditures 3. Paid $4.800 on May 1, 2016. for one year's lease on the company van in advance, 4. Paid $7.200 on May 2,2016 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. 1. Sold 102 alarm systems for $57,120. All sales were on account. (Compute cost of goods sold using the FIFO cost flow method) 8. Paid $2,100 on accounts payable during the year. s y. Replenished the petty cash fund on August 1. At this time, the petty cash had only $7 of currency left. It contained me receipts: office supply expense $23, cutting grass $55, and miscellaneous $14. 10. Billed $52,000 of monitoring services for the year. 11. Paid installers and other employees a total of $25,000 cash for salaries 12. Collected $89,300 of accounts receivable during the year. 13. Paid $3,600 of advertising expense during the year. 14. Paid $2,500 of utilities expense for the year. 15. Paid a dividend of $10,000 to the shareholders. HINTS: First record the Journal entries for each transaction listed above and then record the transactions on the Trial Balance worksheet. ALSO, set up an Excel Spreadsheet like the Trial Balance sheet shown on next page and use to record adjusting entries INSTRUCTIONS: A. Prepare and record the Adjusting Journal Entries B Complete the trial balance worksheet LISTED on the PRIOR page for the month ended December 31, 200x for Palicio Security Service Company based on the transactions RECORDED IN THE JOURNAL ENTRIES LISTED ABOVE: c. Prepare the trial balance as at Dec 31, 2016 for Palicio Security Services D. Prepare the income statement for Palicio Security Services as of Dec 31, 2016 E. Prepare statement of changes in equity for Palicio Security Services as of Dec 31, 2016 F. Prepare the balance sheet for Palicio Security Services Inc. as of Dec 31, 2016

A, B,C,D,E,F

Answer 1

A) Prepare Adjusting journal entries
S.No.	Date	Particulars	J.F	Debit	Credit
1	2016	Salary expense a/c		$1000
		To Salary payable			$1000
		(being salary payable)
2.		Petty cash a/c		$100
		To Cash			$100
		(being the establishment of petty cash)
3.		Prepaid expense a/c		$4800
		To cash			$4800
		(Being rent in advance is paid)
4.		Prepaid rent a/c		$7200
		To Cash			$7200
		(Being rent in advance is paid)
5.		Supplies Expense a/c		$400
		To supplies on hand			$400
		(being supplies on hand is purchased)
6.		Purchase a/c		$28000
		To cash			$28000
		(Being 100 alarm system purchased in cash)
7.		Accounts receivable a/c		$28560
		Cost of goods sold a/c(102*280)		$28560
		To sales			$57120
		(being 102 alarm systems sold)
8.		Purchase a/c		$2100
		To account payable			$2100
		(being accounts payable on account)
9.		Office supply expense a/c		$23
		Cutting grass a/c		$55
		Other expenses a/c		$14
		To petty cash			$7
		To cash(balance)			$85
		(being extra cash needed to meet the expenses)

B&C) trail balance and adjustments

Account	Trial balance		Adjustments		Adjusted Trial balance
	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$74210			$68745	$5465
Accounts Receivable	$13500		$28560		$41560
Supplies	$200		$400		$600
Prepaid Rent	$3200		$7200		$10400
Accounts payable		$1950	$2100		$150
Salary payable		$1000	$1000		$0
Total	$91110	$2950			$58175