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During 2015, Pacilio Security Services experienced the following transactions:

1. Paid the salaries payable from 2014 on January 3, 2015.

2. On January 15, purchased 20 standard alarm systems for cash at a cost of $250 each.

3. On February 1, paid the accounts payable of $1080, but not within the discount period. (The company uses the gross method.)

4. On March 1, leased a business van. Paid $4,800 for one years lease in advance.

5. Paid $7,200 on May 1 for one years rent on the office in advance.

6. On May 15, purchased with cash $500 of supplies to be used over the next several months by the business

7. Purchased with cash another 25 alarm systems on May 20 for resale at a cost of $260 each.

8. On May 30, purchased on account 30 standard alarm systems at a cost of $265.

9. On June 1, installed 60 standard alarm systems for $33,000. $22,000 of the sales were on account and $11,000 were cash sales. (Note: Be sure to record cost of goods sold using the perpetual FIFO method.)

10. On June 10, made a full refund to a dissatisfied customer who returned her alarm system. The sale had been a cash sale for $550 with a cost of $260.

11. On July 10, paid installers and other employees a total of $21,000 cash for salaries.

12. On August 5, sold $45,000 of monitoring services on account.

13. On October 1, sold an additional monitoring service for $1,200 for one years service. The customer paid the full amount of $1,200 on October 1.

14. On October 30, collected $71,000 of accounts receivable.

15. On November 15, paid an additional $6,000 to settle some of the accounts payable.

16. On November 30, paid $3,500 of advertising expense during the year.

17. On December 30, paid $2,320 of utilities expense for the year.

18. On December 31, collected $3,000 of accounts receivable.

19. Paid a dividend of $15,000 to the shareholders.Adjustments.

20. There was $200 of supplies on hand at the end of the year

21. Recognized the expired rent for both the van and the office building for the year. Record two entriesone for each adjustment. The beginning balance in Prepaid Rent is the remaining balance of the one-year rent payment made on May 1, 2014 in the amount of $6,000.

22. Recognized the revenue earned from October 1, transaction 13.

23. Accrued salaries at December 31, 2015, were $1,000.Requireda.

a. Record the above transactions in the expanded accounting equation provided.

b. Prepare an income statement, statement of changes in stockholders equity, balance sheet, and statement of cash flows.

In 2014, 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, 2015, had the following normal balances: Cash Accounts Receivable Supplies Prepaid Rent Merchandise Inventory (10 @ 216) Land Accounts Payable Salaries Payable Common Stock Retained Earnings $63,860 $20,500 $250 $2,000 $2,160 $4,000 $1,080 $2,500 $50,000 $39,190 $92,770 $92,770

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