The trial balance of Pacilio Security Services, Inc. as of January 1, Year 5, had the following normal balances: Cash $62,860 20,500 150 Accounts receivable Supplies Prepaid rent Merchandise inventory (9 @ $240) 2,000 2,160 4,000 980 Land Accounts payable Salaries payable Common stock Retained earnings 1,500 50,000 39,190 During Year 5, Pacilio Security Services experienced the following transactions: 1. Paid the salaries payable from Year 4. 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 $980, but not within the discount period. (The company uses tbe gross method.) 4. On March 1, leased a business van. Paid $4,800 for one year's lease in advance. 5. Paid $7,200 on May 1 for one year's rent on the office in advance. 6. 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 August 1 for resale at a cost of $260 each. 8. On September 5, purchased on account 30 standard alarm systems at a cost of $265. 9. Installed 60 standard alarm systems for $33,000. Sales of $22,000 were on account, while $11,000 were cash sales. O. Record the cost of goods sold related to the sale from Event 9 using the perpetual FIFO method. 11. 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. Record the reversal of revenue. 12. 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. Record the reversal of cost. 13. Paid installers and other employees a total of $21,000 cash for salaries. 14. Sold $45,000 of monitoring services during the year. The services are billed to the customers each month. 15. Sold an additional monitoring service for $1,200 for one year's service. The customer paid the full amount of $1,200 on October 1. 16. Collected $74,000 of accounts receivable during the year. 17. Paid an additional $6,000 to settle some of the accounts payable. 18. Paid $3,500 of advertising expense during the year. 19. Paid $2,320 of utilities expense for the year. 0. Paid a dividend of $15,000 to the shareholders.
The trial balance of Pacilio Security Services, Inc. as of January 1, Year 5, had the following normal balances: Cash $62,860 20,500 150 Accounts receivable Supplies Prepaid rent Merchandise inventory (9 @ $240) 2,000 2,160 4,000 980 Land Accounts payable Salaries payable Common stock Retained earnings 1,500 50,000 39,190 During Year 5, Pacilio Security Services experienced the following transactions: 1. Paid the salaries payable from Year 4. 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 $980, but not within the discount period. (The company uses tbe gross method.) 4. On March 1, leased a business van. Paid $4,800 for one year's lease in advance. 5. Paid $7,200 on May 1 for one year's rent on the office in advance. 6. 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 August 1 for resale at a cost of $260 each. 8. On September 5, purchased on account 30 standard alarm systems at a cost of $265. 9. Installed 60 standard alarm systems for $33,000. Sales of $22,000 were on account, while $11,000 were cash sales. O. Record the cost of goods sold related to the sale from Event 9 using the perpetual FIFO method. 11. 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. Record the reversal of revenue. 12. 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. Record the reversal of cost. 13. Paid installers and other employees a total of $21,000 cash for salaries. 14. Sold $45,000 of monitoring services during the year. The services are billed to the customers each month. 15. Sold an additional monitoring service for $1,200 for one year's service. The customer paid the full amount of $1,200 on October 1. 16. Collected $74,000 of accounts receivable during the year. 17. Paid an additional $6,000 to settle some of the accounts payable. 18. Paid $3,500 of advertising expense during the year. 19. Paid $2,320 of utilities expense for the year. 0. Paid a dividend of $15,000 to the shareholders.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![## Statement of Cash Flows Preparation
This guide demonstrates how to prepare a statement of cash flows for a company using a detailed template for educational purposes. The example referenced is for Pacilio Security Services, Inc. for the year ended December 31, Year 5.
### Statement of Cash Flows Template Overview
The statement of cash flows includes three main sections: operating activities, investing activities, and financing activities. Each section reflects the cash inflows and outflows related to the company's daily operations, investments, and financial activities for the year.
**Template Layout:**
1. **Header**
- Company Name: Pacilio Security Services, Inc.
- Statement Type: Statement of Cash Flows
- Period: For the Year Ended December 31, Year 5
2. **Sections**
- **Cash flows from operating activities:**
- This section tracks cash transactions related to the core business operations.
- Subcategories typically listed here include receipts from customers, payments to suppliers and employees, interest payments, and tax payments.
- **Net cash flow from operating activities:** The sum of cash inflow and outflow within operating activities.
- **Cash flows from investing activities:**
- This section includes cash transactions for the acquisition and disposal of long-term assets and investments.
- Subcategories might include the purchase or sale of equipment, property acquisitions, or proceeds from the sale of investments.
- **Net cash flow from investing activities:** The total cash flow resulting from all investing activities.
- **Cash flows from financing activities:**
- This section tracks cash transactions related to the company's capital structure.
- Typical subcategories include issuing or repurchasing stock, borrowing and repaying loans, and dividend payments.
- **Net cash flow from financing activities:** The net amount of cash used or generated from financing activities.
- **Ending cash balance:**
- This is the final line showing the company's cash position at the end of the period after combining the results of the three sections.
### Example Data Transcription
Below is the filled template of Pacilio Security Services, Inc. for reference:
```
Pacilio Security Services, Inc.
Statement of Cash Flows
For the Year Ended December 31, Year 5
Cash flows from operating activities:
(Various subcategories from operating activities, e.g., receipts, payments)
Net cash flow from operating activities:.......................................................................................... $0
Cash flows](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3e6565ec-09e8-4421-9e74-683730765269%2F8cd263b5-7830-4bfb-8b24-1812deb2efd0%2Fp46pm7o_processed.jpeg&w=3840&q=75)
Transcribed Image Text:## Statement of Cash Flows Preparation
This guide demonstrates how to prepare a statement of cash flows for a company using a detailed template for educational purposes. The example referenced is for Pacilio Security Services, Inc. for the year ended December 31, Year 5.
### Statement of Cash Flows Template Overview
The statement of cash flows includes three main sections: operating activities, investing activities, and financing activities. Each section reflects the cash inflows and outflows related to the company's daily operations, investments, and financial activities for the year.
**Template Layout:**
1. **Header**
- Company Name: Pacilio Security Services, Inc.
- Statement Type: Statement of Cash Flows
- Period: For the Year Ended December 31, Year 5
2. **Sections**
- **Cash flows from operating activities:**
- This section tracks cash transactions related to the core business operations.
- Subcategories typically listed here include receipts from customers, payments to suppliers and employees, interest payments, and tax payments.
- **Net cash flow from operating activities:** The sum of cash inflow and outflow within operating activities.
- **Cash flows from investing activities:**
- This section includes cash transactions for the acquisition and disposal of long-term assets and investments.
- Subcategories might include the purchase or sale of equipment, property acquisitions, or proceeds from the sale of investments.
- **Net cash flow from investing activities:** The total cash flow resulting from all investing activities.
- **Cash flows from financing activities:**
- This section tracks cash transactions related to the company's capital structure.
- Typical subcategories include issuing or repurchasing stock, borrowing and repaying loans, and dividend payments.
- **Net cash flow from financing activities:** The net amount of cash used or generated from financing activities.
- **Ending cash balance:**
- This is the final line showing the company's cash position at the end of the period after combining the results of the three sections.
### Example Data Transcription
Below is the filled template of Pacilio Security Services, Inc. for reference:
```
Pacilio Security Services, Inc.
Statement of Cash Flows
For the Year Ended December 31, Year 5
Cash flows from operating activities:
(Various subcategories from operating activities, e.g., receipts, payments)
Net cash flow from operating activities:.......................................................................................... $0
Cash flows
![**Trial Balance and Transactions of Pacilio Security Services**
Pacilio Security Services, Inc., as of January 1, Year 5, has the following normal balances:
- Cash: $62,860
- Accounts Receivable: $20,560
- Supplies: $150
- Prepaid Rent: $2,000
- Merchandise Inventory (9 @ $240): $2,160
- Land: $4,000
- Accounts Payable: $980
- Salaries Payable: $1,500
- Common Stock: $50,000
- Retained Earnings: $39,190
**Transactions During Year 5:**
1. Paid the salaries payable from Year 4.
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 $980, 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 year's lease in advance.
5. Paid $7,200 on May 1 for one year’s rent on the office in advance.
6. 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 August 1 for resale at a cost of $260 each.
8. On September 5, purchased on account 30 standard alarm systems at a cost of $265.
9. Installed 60 standard alarm systems for $33,000. Sales of $22,000 were on account, while $11,000 were cash sales.
10. Recorded the cost of goods sold related to the sale from Event 9 using the perpetual FIFO method.
11. 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. Recorded the reversal of revenue.
12. 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. Recorded the reversal of cost.
13. Paid installers and other employees a total of $21,000 cash for salaries.
14. Sold $45,000 of monitoring services during the year. The services are billed to the customers each month.
15. Sold and installed alarm monitoring service for $1,200](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3e6565ec-09e8-4421-9e74-683730765269%2F8cd263b5-7830-4bfb-8b24-1812deb2efd0%2F4m9h8nf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Trial Balance and Transactions of Pacilio Security Services**
Pacilio Security Services, Inc., as of January 1, Year 5, has the following normal balances:
- Cash: $62,860
- Accounts Receivable: $20,560
- Supplies: $150
- Prepaid Rent: $2,000
- Merchandise Inventory (9 @ $240): $2,160
- Land: $4,000
- Accounts Payable: $980
- Salaries Payable: $1,500
- Common Stock: $50,000
- Retained Earnings: $39,190
**Transactions During Year 5:**
1. Paid the salaries payable from Year 4.
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 $980, 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 year's lease in advance.
5. Paid $7,200 on May 1 for one year’s rent on the office in advance.
6. 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 August 1 for resale at a cost of $260 each.
8. On September 5, purchased on account 30 standard alarm systems at a cost of $265.
9. Installed 60 standard alarm systems for $33,000. Sales of $22,000 were on account, while $11,000 were cash sales.
10. Recorded the cost of goods sold related to the sale from Event 9 using the perpetual FIFO method.
11. 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. Recorded the reversal of revenue.
12. 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. Recorded the reversal of cost.
13. Paid installers and other employees a total of $21,000 cash for salaries.
14. Sold $45,000 of monitoring services during the year. The services are billed to the customers each month.
15. Sold and installed alarm monitoring service for $1,200
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