Question

In: Accounting

The trial balance of Pacilio Security Services, Inc. as of January 1, Year 6, had the...

The trial balance of Pacilio Security Services, Inc. as of January 1, Year 6, had the following normal balances:

Cash $ 74,210
Accounts Receivable 13,500
Supplies 200
Prepaid Rent 3,200
Merchandise Inventory (24 @ $265; 1 @ $260) 6,620
Land 4,000
Accounts Payable 1,950
Unearned Revenue 900
Salaries Payable 1,000
Common Stock 50,000
Retained Earnings 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.

20. 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.

Recorded any debit memos or checks not included on books as part of the bank reconciliation.

Recorded any credit memos or interest received not included on books as part of the bank reconciliation.

******************************

*****Prepare a General Journal, Income Statement, Change in Stockholders Equity, Balance Sheet, Statement of Cash Flows, Bank Reconciliation Statement, and an Analysis******

Solutions

Expert Solution

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
Date Account Debit Credit
1 Salaries Payable $    1,000
Cash $    1,000
Mar 1 Petty Cash $        100
Cash $        100
Mar 1 Prepaid Lease $    4,800
Cash $    4,800
May 2 Prepaid Rent $    7,200
Cash $    7,200
5 Supplies $        400
Accounts Payable $        400
6 Merchandise Inventory $ 28,000
Cash $ 28,000
7 Accounts Receivable $ 57,120
Sales $ 57,120
8 Cost of Goods Sold $ 28,180
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 Accounts Receivable $ 52,000
Service Revenue $ 52,000
12 Salaries Expense $ 25,000
Cash $ 25,000
13 Cash $ 89,300
Accounts Receivable $ 89,300
14 Advertising Expense $    3,600
Cash $    3,600
15 Utilities Expense $    2,500
Cash $    2,500
16 Dividends $ 10,000
Cash $ 10,000
Adjusting
Dec 31 Supplies Expenses $        440
Supplies $        440
(200+400-160)
Dec 31 Lease Expense $    4,000 4800/12*10
Rent Expense $    7,200
Prepaid Lease $    4,000
Prepaid Rent $    7,200
Dec 31 Unearned Revenue $        900
Service Revenue $        900
Dec 31 Salaries Expense $    1,400
Salaries Payable $    1,400
Bank Reco:
3 Office Supplies Expense $          55
Cash $          55
4 Cash $          30
Interest Income $          30
5 Accounts Receivable $        120
Cash $        120
Trial
Beginning Year 6 Trx Final
Accounts Debit Credit Debit Credit Debit Credit
Cash $              74,210 $           4,763 $   78,973
Petty Cash $               100 $         100
Merchandise Inventory $                6,620 $         180 $      6,440
Accounts Receivable $              13,500 $         19,940 $   33,440
Prepaid Rent $                3,200 $                  -   $      3,200
Prepaid Lease $               800 $         800
Supplies $                    200 $            40 $         160
Land $                4,000 $      4,000
Accounts Payable $                   1,950 $           1,700 $         250
Salaries Payable $                   1,000 $         400 $      1,400
Unearned Revenue $                      900 $               900 $             -  
Common Stock $                50,000 $   50,000
Retained Earning $                47,880 $   47,880
Dividends $         10,000 $   10,000
Sales $   57,120 $   57,120
Service Revenue $   52,900 $   52,900
Interest Income $            30 $            30
Cost of Goods Sold $         28,180 $   28,180
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
Salaries Expense $         26,400 $   26,400
Supplies Expenses $               440 $         440
Utilities Expense $           2,500 $      2,500
Total $           101,730 $              101,730 $      110,670 $ 110,670 $ 209,580 $ 209,580
a. Income Statement:
Sales Revenue $              57,120
Service Revenue $              52,900
Total Revenue $              110,020
Less: Cost of Goods Sold $                28,180
Gross Margin $                81,840
Less: Operating Expenses:
Cutting Expense $                      55
Advertising Expense $                3,600
Lease Expense $                4,000
Rent Expense $                7,200
Miscellaneous Expenses $                      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
Net Income $                37,583
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 B $                75,463
Total Equity $              125,463
c. Balance Sheet
Assets
Current Assets:
Cash $              78,973
Petty Cash $                    100
Merchandise Inventory $                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 $              125,463
Total Liabilities and Stockholder's Equity $              127,113 $                  -  
d. Statement of Cash Flow
Net Income $                37,583
Adjustment to Net income:
Cash Over
Increase in Receivable $               -19,940
Decrease in inventory $                      180
Decrease in supplies $                         40
Increase in Prepaid Lease $                     -800
Decrease in Accounts Payable $                 -1,700
Decrease in Unearned Revenue $                     -900
Increase in Salaries Payble $                      400
Net Cash flow from Operating Activities $                14,863
Cash flow from Investing activities:
Net Cash from Investing Activities $                          -  
Cash flow from financing activities:
Paymen tof Dividends $               -10,000
Net Cash from Financing Activities $               -10,000
Net Increase in Cash $                   4,863
Add: Beginning Balance $                74,210
Ending Balance (Including Petty) $                79,073
f. Bank Reco
Unadjusted Balance as per Bank $                80,822
Less: Outstanding Checks $                 -8,350
Add: Deposit in Transit $                   6,500
Cash Balance adjusted (before over recording) $                78,972

Related Solutions

The trial balance of Pacilio Security Services, Inc. as of January 1, Year 6, had the...
The trial balance of Pacilio Security Services, Inc. as of January 1, Year 6, had the following normal balances: Cash $ 74,210 Accounts Receivable 13,500 Supplies 200 Prepaid Rent 3,200 Merchandise Inventory (24 @ $265; 1 @ $260) 6,620 Land 4,000 Accounts Payable 1,950 Unearned Revenue 900 Salaries Payable 1,000 Common Stock 50,000 Retained Earnings 47,880 During Year 6, Pacilio Security Services experienced the following transactions: Paid the salaries payable from Year 5. On March 1, Year 6, Pacilio established...
The trial balance of Pacilio Security Services, Inc. as of January 1, Year 4, had the...
The trial balance of Pacilio Security Services, Inc. as of January 1, Year 4, had the following normal balances: Cash $ 12,500 Accounts Receivable 3,500 Supplies 120 Prepaid Rent 1,000 Land 4,000 Unearned Revenue 900 Salaries Payable 1,000 Common Stock 8,000 Retained Earnings 11,220 In Year 4, Pacilio Security Services decided to expand its business to sell security systems and offer 24-hour alarm monitoring services. It plans to phase out its current service of providing security personnel at various events....
The trial balance of Pacilio Security Services, Inc. as of January 1, Year 5, had the...
The trial balance of Pacilio Security Services, Inc. as of January 1, Year 5, had the following normal balances: Cash $ 62,860 Accounts receivable 20,500 Supplies 150 Prepaid rent 2,000 Merchandise inventory (9 @ $240) 2,160 Land 4,000 Accounts payable 980 Salaries payable 1,500 Common stock 50,000 Retained earnings 39,190 During Year 5, Pacilio Security Services experienced the following transactions: Paid the salaries payable from Year 4. On January 15, purchased 20 standard alarm systems for cash at a cost...
The trial balance of Pacilio Security Services, Inc. as of January 1, Year 5, had the...
The trial balance of Pacilio Security Services, Inc. as of January 1, Year 5, had the following normal balances: Cash $ 62,860 Accounts receivable 20,500 Supplies 150 Prepaid rent 2,000 Merchandise inventory (9 @ $240) 2,160 Land 4,000 Accounts payable 980 Salaries payable 1,500 Common stock 50,000 Retained earnings 39,190 During Year 5, Pacilio Security Services experienced the following transactions: Paid the salaries payable from Year 4. On January 15, purchased 20 standard alarm systems for cash at a cost...
The trial balance of Pacilio Security Services, Inc. as of January 1, Year 9, had the...
The trial balance of Pacilio Security Services, Inc. as of January 1, Year 9, had the following normal balances: Cash $ 93,380 Petty cash 100 Accounts receivable 21,390 Allowance for doubtful accounts 2,485 Supplies 180 Prepaid rent 3,000 Merchandise inventory (23 @ $280) 6,440 Equipment 9,000 Van 27,000 Accumulated depreciation 14,900 Salaries payable 1,500 Common stock 50,000 Retained earnings 91,605 During Year 9, Pacilio Security Services experienced the following transactions: Paid the salaries payable from Year 8. Paid $9,000 on...
The trial balance of Pacilio Security Services, Inc. as of January 1, Year 11, had the following normal balances:
Chapter 11 Comprehensive ProblemThe trial balance of Pacilio Security Services, Inc. as of January 1, Year 11, had the following normal balances:Cash$113,718Petty cash100Accounts receivable39,390Allowance for doubtful accounts4,662Supplies210Merchandise inventory (48 @ $300)14,400Equipment9,000Van27,000Building125,000Accumulated depreciation28,075Land25,000Sales tax payable390Employee income tax payable1,000FICA—Social Security tax payable840FICA—Medicare tax payable210Warranty payable918Unemployment tax payable945Notes payable—Building92,762Bonds payable50,000Discount on bonds payable800Common stock50,000Retained earnings124,816During Year 11, Pacilio Security Services experienced the following transactions:Paid the sales tax payable from Year 10.Paid the balance of the payroll liabilities due for Year 10 (federal income...
The trial balance of pacillo security services inc as of January 1 2018 had the following...
The trial balance of pacillo 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 Pacillo Security Services experienced the following transactions: Paid the salaries payable...
The trial balance of Palicio Security Services Inc. as of January 1, 2016 had following normal balances:
The trial balance of Palicio Security Services Inc. as of January 1, 2016 had following normal balances: 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...
The following is the trial balance for Eazy Services, Inc.: Eazy Services, Inc. Trial Balance For...
The following is the trial balance for Eazy Services, Inc.: Eazy Services, Inc. Trial Balance For the Year Ended December 31, 201X DR CR Cash $50,250 Accounts Receivable 27,900 Office Equipment 45,000 Accounts Payable 37,250 Common Stock 60,300 Dividends 2,500 Retained Earnings 00 Sales Revenue 70,000 Salary Expense 33,650 Operating Expense 8,250 167,550 167,550 Prepare an Income Statement, Statement of Changes in Stockholders’ Equity and a Balance Sheet. (Assume that the company issued $60,300 of common stock on January 2,...
Dreamland Security Services Inc. had the following account balances as of January 1, 2020: 1. On...
Dreamland Security Services Inc. had the following account balances as of January 1, 2020: 1. On January 1, 2020, Dreamland purchased land for $10,000 and a building for $90,000. The land was paid for with cash. The building was paid for with $5,000 cash and the remainder was financed with a 10-year notes payable. 2. Paid the accounts payable balance from 2019. 3. Purchase $500 of supplies on account. 4. Purchased 100 alarm systems (inventory) on account at a cost...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT