The trial balance of Pacilio Security Services, Inc. as of January 1, Year 3, had the following normal balances: Cash Accounts Receivable Supplies Prepaid Rent Land Accounts Payab le Unearned Revenue Salaries Payable Notes Payable Common Stock Retained Earnings $8,900 1,500 65 800 4,000 1,050 200 1,200 2,e00 8,000 2,815 During Year 3, Pacilio Security Services experienced the following transactions: 1. Paid the salaries payable from Year 2. 2. Paid the balance of $2,000 on the debt owed to the Small Business Government Agency. The loan is interest-free. 3. Performed $32,000 of security services for numerous local events during the year: $21.000 was on account and $11,000 was for cash. 4. On May 1, paid $3,000 for 12 months' rent in advance. 5. Purchased supplies on account for $700. 6. Paid salaries expense for the year of $9,000. 7. Incurred other operating expenses on account, $4,200. 8. On October 1, Year 3, a customer paid $1,200 for services to be provided over the next 12 months. 9. Collected $19,000 of accounts receivable during the year. 0. Paid $5,950 on accounts payable. 11. Paid $1,800 of advertising expenses for the year. 12. Paid a cash dividend to the shareholders of $4,650. 13. The market value of the land was determined to be $5,500 at December 31, Year 3. Adjustments 14. There was $120 of supplies on hand at the end of the year. 15. Recognized the expired rent. 16. Recognized the earned revenue from Year 2 and transaction no. 8. 17. Accrued salaries were $1,000 at December 31, Year 3.
The trial balance of Pacilio Security Services, Inc. as of January 1, Year 3, had the following normal balances: Cash Accounts Receivable Supplies Prepaid Rent Land Accounts Payab le Unearned Revenue Salaries Payable Notes Payable Common Stock Retained Earnings $8,900 1,500 65 800 4,000 1,050 200 1,200 2,e00 8,000 2,815 During Year 3, Pacilio Security Services experienced the following transactions: 1. Paid the salaries payable from Year 2. 2. Paid the balance of $2,000 on the debt owed to the Small Business Government Agency. The loan is interest-free. 3. Performed $32,000 of security services for numerous local events during the year: $21.000 was on account and $11,000 was for cash. 4. On May 1, paid $3,000 for 12 months' rent in advance. 5. Purchased supplies on account for $700. 6. Paid salaries expense for the year of $9,000. 7. Incurred other operating expenses on account, $4,200. 8. On October 1, Year 3, a customer paid $1,200 for services to be provided over the next 12 months. 9. Collected $19,000 of accounts receivable during the year. 0. Paid $5,950 on accounts payable. 11. Paid $1,800 of advertising expenses for the year. 12. Paid a cash dividend to the shareholders of $4,650. 13. The market value of the land was determined to be $5,500 at December 31, Year 3. Adjustments 14. There was $120 of supplies on hand at the end of the year. 15. Recognized the expired rent. 16. Recognized the earned revenue from Year 2 and transaction no. 8. 17. Accrued salaries were $1,000 at December 31, Year 3.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Answer full question.
![### Understanding the Balance Sheet
The balance sheet follows the fundamental accounting equation: **Assets = Liabilities + Equity**. Each asset and liability account is reported separately on the balance sheet. This document provides the structure to choose the appropriate accounts to report, breaking them down into unadjusted, adjusted, or post-closing balances.
### Sample Balance Sheet
Below is a sample balance sheet for Pacilio Security Services, Inc., for the period ending December 31, Year 3.
#### Pacilio Security Services, Inc.
**Balance Sheet**
*At December 31, Year 3*
##### Assets
- [Specific Asset Accounts will be listed here; currently, lines are blank]
##### Liabilities
- [Specific Liability Accounts will be listed here; currently, lines are blank]
##### Stockholders' Equity
- [Specific Equity Accounts will be listed here; currently, lines are blank]
- **Total Stockholders' Equity**: 0
At the bottom of the balance sheet interface, there are two buttons:
1. **Changes in SE**: Likely navigates to a page or section detailing changes in stockholders' equity.
2. **Statement of CF**: Likely navigates to a page or section detailing the cash flow statement.
#### Graphs and Diagrams Explanation
While the current screen does not show any graphs or diagrams, it provides a template for entering financial information. This balance sheet is a vital tool in understanding the financial position of the company, providing insights into what the company owns (assets), owes (liabilities), and the residual interest (equity).
For educational purposes, students could fill in the specific accounts under each category to understand the formulation and significance of the balance sheet in financial accounting. The blank lines signify where detailed account names and values would be entered to complete the balance sheet.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3e6565ec-09e8-4421-9e74-683730765269%2F8f9eb4b1-a8f1-4714-a5f1-a91e29c01066%2Fekdl4bc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Understanding the Balance Sheet
The balance sheet follows the fundamental accounting equation: **Assets = Liabilities + Equity**. Each asset and liability account is reported separately on the balance sheet. This document provides the structure to choose the appropriate accounts to report, breaking them down into unadjusted, adjusted, or post-closing balances.
### Sample Balance Sheet
Below is a sample balance sheet for Pacilio Security Services, Inc., for the period ending December 31, Year 3.
#### Pacilio Security Services, Inc.
**Balance Sheet**
*At December 31, Year 3*
##### Assets
- [Specific Asset Accounts will be listed here; currently, lines are blank]
##### Liabilities
- [Specific Liability Accounts will be listed here; currently, lines are blank]
##### Stockholders' Equity
- [Specific Equity Accounts will be listed here; currently, lines are blank]
- **Total Stockholders' Equity**: 0
At the bottom of the balance sheet interface, there are two buttons:
1. **Changes in SE**: Likely navigates to a page or section detailing changes in stockholders' equity.
2. **Statement of CF**: Likely navigates to a page or section detailing the cash flow statement.
#### Graphs and Diagrams Explanation
While the current screen does not show any graphs or diagrams, it provides a template for entering financial information. This balance sheet is a vital tool in understanding the financial position of the company, providing insights into what the company owns (assets), owes (liabilities), and the residual interest (equity).
For educational purposes, students could fill in the specific accounts under each category to understand the formulation and significance of the balance sheet in financial accounting. The blank lines signify where detailed account names and values would be entered to complete the balance sheet.
Transcribed Image Text:**Trial Balance and Transactions of Pacilio Security Services**
### Trial Balance
As of January 1, Year 3, the trial balance for Pacilio Security Services, Inc. included the following normal balances:
- **Cash**: $8,900
- **Accounts Receivable**: $1,500
- **Supplies**: $65
- **Prepaid Rent**: $800
- **Land**: $4,000
- **Accounts Payable**: $1,050
- **Unearned Revenue**: $200
- **Salaries Payable**: $1,200
- **Notes Payable**: $2,000
- **Common Stock**: $8,000
- **Retained Earnings**: $2,815
### Year 3 Transactions
During Year 3, the following transactions were recorded:
1. Paid the salaries payable from Year 2.
2. Paid the balance of $2,000 on the debt owed to the Small Business Government Agency. The loan is interest-free.
3. Performed $32,000 of security services for numerous local events during the year; $21,000 was on account and $11,000 was for cash.
4. On May 1, paid $3,000 for 12 months’ rent in advance.
5. Purchased supplies on account for $700.
6. Paid salaries expense for the year of $9,000.
7. Incurred other operating expenses on account, totaling $4,200.
8. On October 1, a customer paid $1,200 for services to be provided over the next 12 months.
9. Collected $19,000 of accounts receivable during the year.
10. Paid $5,950 on accounts payable.
11. Paid $1,800 of advertising expenses for the year.
12. Paid a cash dividend to the shareholders of $4,650.
13. The market value of the land was determined to be $5,500 on December 31, Year 3.
### Adjustments
At the end of Year 3, the following adjustments were made:
14. There was $120 of supplies on hand.
15. Recognized the expired rent.
16. Recognized the earned revenue from Year 2 and transaction no. 8.
17. Accrued salaries were $1,000 at December 31, Year 3.
###
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