Financial Accounting: Comprehensive Problem 7-1 The trial balance of Pacilio Security Services Inc

Financial Accounting 
Comprehensive Problem 7-1 
The trial balance of Pacilio Security Services Inc. as of January 1, 2017, had the following normal balances: 
Cash 78,972 
Petty Cash 100 
Accounts Receivable 33,440 
Supplies 160 
Prepaid Rent 3,200 
Merchandise Inventory (23 @$280) 6,440 
Land 4,000 
Accounts Payable 250 
Salaries Payable 1,400 
Common Stock 50,000 
Retained Earnings 74,662 

During 2017, Pacilio Security Services experienced the following transactions: 
1. Paid the salaries payable from 2016. 
2. Paid $4,800 on March 1, 2017, for one year's lease in advance on the company van. 
3. Paid $8,400 on May 2, 2017 for one year's office rent in advance. 
4. Purchased $550 of supplies on account. 
5. Paid cash to purchase 105 alarm systems at a cost of $285 each. 
6. Pacilio has noticed its accounts receivable balance is growing more than desired and some collection problems exist. It appears that uncollectible accounts expense is approximately 3 percent of total credit sales. Pacilio has decided it will, starting this year, adopt the allowance method of accounting for uncollectible accounts. It will record an adjusting entry to recognize the estimate at the end of the year.  
7. In trying to collect several of its delinquent accounts, Pacilio has learned that these customers have either declared bankruptcy or moved and left no forwarding address. These uncollectible accounts amount to $1,900. 
8. Sold 110 alarm systems for $63,800. All sales were on account. (Compute cost of goods sold using FIFO cost flow method). 
9. Paid the balance of the accounts payable. 
10. Pacilio began accepting credit cards for some of its monitoring service sales. The credit card company charges a fee of 4 percent. Total monitoring services for the year were $68,000. Pacilio accepted credit card for $24,000 of this amount. The other $44,000 were sales on account. 
11. On July 1, 2017, Pacilio replenished the petty cash fund. The fund contained $21 of currency and receipts of $50 for yard mowing, $22 for office supplies expense, and $9 for miscellaneous expenses. 
12. Collected the amount due from the credit card company. 
13. Paid installers and other employees a total of $45,000 cash for salaries. 
14. Collected $116,800 of accounts receivable during the year. 
15. Paid $9,500 of advertising expense during the year. 
16. Paid $5,200 of utilities expense for the year. 
17. Paid a dividend of $20,000 to the shareholders. 

18. There was $250 of supplies on hand at the end of the year. 
19. Recognized the expired rent for both the van and the office for the year. 
20. Recognized the uncollectible accounts expense for the year using the allowance method. 
21. Accrued salaries at December 31, 2017, were $2,100. 

a. Record the above transactions in general journal form. 
b. Post the transactions to the T-accounts. 
c. Prepare a trial balance.  
d. Prepare an income statement, statement of changes in stockholders’ equity, a classified balance sheet, and statement of cash flows.  
e. Close the temporary accounts to retained earnings.  
f. Post the closing entries to the T-accounts and prepare an after-closing trial balance.