The Trial Balance of Pacilio Security Services Inc as of Jan, 1 2018 had the fol

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 miscellaneous exepenses.

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.

Explanation / Answer

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 $1,500

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