The trial balance of Pacilio Security Services Inc. as of January 1. 2018. had the following normal balances:
Cash | $93,708 |
Petty cash | 100 |
Accounts 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 Pacilio Security Services experienced the following transactions:
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 account. (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, and the credit card company charged a 4 percent fee. 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 miscellaneous expenses.
10. Collected the amount due from the credit card company.
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.
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