Question

The Trial Balance of Pacilio Security Services Inc as of Jan, 1 2018 had the following normal balances.

Cash $93,708
Petty Cash $100
Account 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 2018 Pacillo Security Services experienced the following transaction:
1. Paid the salaries payable from 2017.
2. Purchased equipment and a van for a lump sum of $ 36,000 cash on January 2, 2018. The equipment was appraised for $10,000 and the van was appraised for$30,000.
3. Paid $9,000 on May 1, 2018 for one year's Office rent in advance.
4.Purchased $300 of supplies on account.
5.Purchased 120 alarm systems at a cost of $280 each. Paid cash for the purchase.
6.After numerous attempts to collect from customers, wrote off $2,350 of uncollectible accounts receivable.
7.Sold 115 alarm systems for $580 each. All sales were on accounts. (Be sure to compute cost of goods sold using the FIFO cost flow method.)
8.Billed $86,000 of monitoring services for the year. Credit card sales amounted to $36,000. The remaining $50,000 were sales on account.
9.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 miscellaneousexepenses.

11. Paid installers and other employees a total of $52,000 cash for salaries.
12. Collected $115,500 of accounts receivable during the year.
13.Paid $12,500 of advertising expense during the year.
14.Paid $6,800 of utilities expense for the year.
15. Sold the land, which was purchased in 2011, for $12,000.
16. Paid the accounts payable.
17.Paid a dividend of $10,000 to the shareholders.
ADJUSTMENTS
18.Determined that $180 of supplies were on hand at the end of the year.
20.Recognized uncollectible accounts expense fo the year using the allowance method. Pacilio estimates that 3 percent of sales on account will not be collected.
21.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 straight-line for the van and the equipment.
22.Accrued salaries at December 31,3018, were $1,500.
REQUIRED:

c.Prepare a trial balance.

Answer 1

1
	Salaries payable	$2,100
	cash		$2,100
2	Equipment	$30,000
	Van	$10,000
	Cash		$36,000
	Profit on purchase of assets		$4,000
3	prepaid rent	$9,000
	cash		$9,000
4	supplies	$300
	cash		$300
5	alaram systems	$33,600
	cash		$33,600
6	Bad debts expenses	$2,350
	Accounts receivable		$2,350
7	Accounts receivables	$66,700
	Alarm systems sales		$66,700
8	Accounts receivables against credit card	$36,000
	Accouts receivable	$50,000
	Service revenue		$86,000
9	Cash	$36,000
	Accounts receivables		$36,000
10	Salaries expenses	$52,000
	cash		$52,000
11	cash	$115,500
	Accounts receivables		$115,500
12	Advertising expenses	$12,500
	cash		$12,500
13	utilities expenses	$6,800
	cash		$6,800
14	cash	$12,000
	Land		$12,000
17	dividends	$10,000
	cash		$1,000
18	Supplies expenses	$370
	supplies		$370
19	Rent expenses	$4,800
	cash		$4,800
20	Allowances for doubtful debts	$2,000
	Accounts receivables		$2,000
21	Depreciation expenses	$10,600
	Accumulated deprecition-van		$5,000
	Accumulated dep-equipment		$5,600
22	Salaries expenses	$1,500
	salaries payable