Question

The trial balance of Pacilio Security Services Inc. as of January 1, 2012, was as follows:
Cash ........ $8,500
Land ....... 4,000
Notes Payable .... 5,000
Common Stock .. 6,000
Retained Earnings . 1,500
During 2012, Pacilio Security Services experienced the following transactions:
1. Acquired an additional $2,000 from the issue of common stock.
2. Paid $3,000 on the debt owed to the Small Business Government Agency. The loan is interest free.
3. Performed $21,000 of security services for numerous local events during the year; $15,000 was on account and $6,000 was cash.
4. On May 1, rented a small office building. Paid $2,400 for 12 months’ rent in advance.
5. Purchased supplies on account for $650.
6. Paid salaries expense for the year of $8,000.
7. Incurred other operating expenses on account, $6,200.
8. On September 1, 2012, a customer paid $600 for services to be provided over the next six months.
9. Collected $13,500 of accounts receivable during the year.
10. Paid $5,800 on accounts payable.
11. Paid $1,500 of advertising expenses for the year.
12. Paid a cash dividend to the shareholders of $1,000.
13. The market value of the land was determined to be $5,000 at December 31, 2012.

Information for Adjustments
14. There was $65 of supplies on hand at the end of the year.
15. Recognized the expired rent.
16. Recognized the revenue earned from Transaction 8.
17. Accrued salaries were $1,200 at December 31, 2012.

Required
a. Record the above transactions in an accounting equation. Provide the appropriate account titles for the amounts shown in the Retained Earnings column.
b. Prepare an income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for 2012.



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  • CreatedOctober 12, 2013
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