Question

  Cash $ 113,718   Petty cash 100   Accounts receivable 39,390   Allowance for doubtful accounts 4,662   Supplies 210...

  Cash $ 113,718
  Petty cash 100
  Accounts receivable 39,390
  Allowance for doubtful accounts 4,662
  Supplies 210
  Merchandise inventory (48 @ $300) 14,400
  Equipment 9,000
  Van 27,000
  Building 125,000
  Accumulated depreciation 28,075
  Land 25,000
  Sales tax payable 390
  Employee income tax payable 1,000
  FICA—Social Security tax payable 840
  FICA—Medicare tax payable 210
  Warranty payable 918
  Unemployment tax payable 945
  Notes payable—Building 92,762
  Bonds payable 50,000
  Discount on bonds payable 800
  Common stock 50,000
  Retained earnings 124,816

I need to Indicate whether the transaction increases (+), decreases (–), or increases and decreases (+/-) for each element of the financial statements. Also, in the Cash Flow column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity. The first transaction is recorded as an example.

During 2021, Pacilio Security Services experienced the following transactions:

1. Paid the sales tax payable from 2020.
2.

Paid the balance of the payroll liabilities due for 2020 (federal income tax, FICA taxes, and unemployment taxes).

3.

Issued 5,000 additional shares of the $5 par value common stock for $8 per share and 1,000
shares of $50 stated value, 5 percent cumulative preferred stock for $52 per share.

4. Purchased $500 of supplies on account.
5.

Purchased 190 alarm systems at a cost of $310. Cash was paid for the purchase.

6.

After numerous attempts to collect from customers, wrote off $3,670 of uncollectible accounts receivable.

7.

Sold 210 alarm systems for $600 each plus sales tax of 5 percent. All sales were on account. (Be sure to compute cost of goods sold using the FIFO cost flow method.)

8. Billed $125,000 of monitoring services for the year. Credit card sales amounted to $58,000, and the credit card company charged a 4 percent fee. The remaining $67,000 were sales on account. Sales tax is not charged on this service.
9. Replenished the petty cash fund on June 30. The fund had $10 cash and receipts of $75 for yard mowing and $15 for office supplies expense.
10. Collected the amount due from the credit card company.
11.

Paid the sales tax collected on $105,000 of the alarm sales.

12. Collected $198,000 of accounts receivable during the year.
13. Paid installers and other employees a total of $96,000 for salaries for the year. Assume the Social Security tax rate is 6 percent and the Medicare tax rate is 1.5 percent. Federal income taxes withheld amounted to $10,600. No employee exceeded $110,000 in total wages. The net salaries were paid in cash.
14. On October 1, declared a dividend on the preferred stock and a $1 per share dividend on the common stock to be paid to shareholders of record on October 15, payable on November 1, 2021.
15. Paid $1,625 in warranty repairs during the year.
16. On November 1, 2021, paid the dividends that had been previously declared.
17. Paid $18,500 of advertising expense during the year.
18. Paid $6,100 of utilities expense for the year.
19. Paid $9,200 of the Employee Income Tax Payable, $5,280 of the FICA Tax – Soc. Sec. Tax Payable and $1,320 of the FICA Tax – Medicare Tax Payable. Also, paid the Payroll Tax Expense for the 7.5% employer matching of FICA taxes on $88,000 of salaries.
20. Paid the accounts payable.
21. Paid bond interest and amortized the discount. The bond was issued in 2020 and pays interest at 6 percent.
22. Paid the annual installment of $14,238 on the amortized note. The interest rate for the note is 7 percent.
Adjustment
23. There was $190 of supplies on hand at the end of the year.
24. Recognized the uncollectible accounts expense for the year using the allowance method. Pacilio now estimates that 1 percent of sales on account will not be collected.
25. Recognized depreciation expense on the equipment, van, and building. The equipment, purchased in 2018, has a five-year life and a $2,000 salvage value. The van has a four-year life and a $6,000 salvage value. The building has a 40-year life and a $10,000 salvage value. The company uses straight-line for the equipment and the building. The van is fully depreciated.
26. The alarm systems sold in transaction 7 were covered with a one-year warranty. Pacilio estimated that the warranty cost would be 2 percent of alarm sales.
27. The unemployment tax on the three employees has not been paid. Record the accrued unemployment tax on the salaries for the year. The unemployment tax rate is 4.5 percent and gross wages for all three employees exceeded $7,000.
28. Recognized the employer Social Security and Medicare payroll tax that has not been paid on $8,000 of salaries expense.

Homework Answers

Answer #1
Transaction No. Increase/ Decrease Cash flow
1 Decrease OA
2 Decrease OA
3 Increase FA
4 Decrease OA
5 Decrease OA
6 Decrease OA
7 Increase OA
8 Increase OA
9 Decrease OA
10 Increase OA
11 Decrease OA
12 Increase OA
13 No effect
14 Decrease FA
15 Decrease OA
16 Decrease FA
17 Decrease OA
18 Decrease OA
19 Decrease OA
20 Decrease OA
21 Decrease FA
22 Decrease FA

The adjustment entries will not have any direct effect on the cash flows and hence not mentioned

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Which Accounts get closed at the end of the year? Cash Petty Cash Accounts Receivable Allowance...
Which Accounts get closed at the end of the year? Cash Petty Cash Accounts Receivable Allowance for Doubtful Accounts Notes Receivable Interest Receivable Inventory Supplies Inventory Prepaid Insurance Prepaid Rent Debt Investments Equity Investments Land Buildings Accum. Depr. - Buildings Equipment Accum. Depr. - Equipment Notes Payable Accounts Payable Salaries and Wages Payable Interest Payable Dividends Payable Long-term Notes Payable Common Stock Retained Earnings Dividends Income Summary Sales Revenue Sales Returns and Allowances Sales Discounts Cost of Goods Sold Advertising...
According to a summary of the payroll of Sinclair Company, $545,000 was subject to the 6.0%...
According to a summary of the payroll of Sinclair Company, $545,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $10,000 was subject to state and federal unemployment taxes. Required: (a) Calculate the employer’s payroll taxes using the following rates: State unemployment, 4.2%; Federal unemployment, 0.8%. (b) Journalize the entry to record the accrual of the employer's payroll taxes. Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS Sinclair...
The following information about the payroll for the week ended December 30 was obtained from the...
The following information about the payroll for the week ended December 30 was obtained from the records of Boltz Co.: Salaries: Deductions: Sales salaries $335,000 Income tax withheld $116,800 Warehouse salaries 186,000 U.S. savings bonds 14,630 Office salaries 144,000 Group insurance 11,970 You are in Column Salaries: $665,000 You are in Column Deductions: Tax rates assumed: Social security 6% State unemployment (employer only) 5.4% You are in Column Tax rates assumed:Medicare You are in Column Tax rates assumed:1.5% You are...
Payroll Accounts and Year-End Entries The following accounts, with the balances indicated, appear in the ledger...
Payroll Accounts and Year-End Entries The following accounts, with the balances indicated, appear in the ledger of Garcon Co. on December 1 of the current year: 211 Salaries Payable — 212 Social Security Tax Payable $15,276 213 Medicare Tax Payable 4,020 214 Employees Federal Income Tax Payable 24,790 215 Employees State Income Tax Payable 24,120 216 State Unemployment Tax Payable 2,546 217 Federal Unemployment Tax Payable 804 218 Bond Deductions Payable 6,000 219 Medical Insurance Payable 46,600 411 Operations Salaries...
According to a summary of the payroll of Scotland Company, salaries for the period were $500,000....
According to a summary of the payroll of Scotland Company, salaries for the period were $500,000. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (4.2%) and federal (0.8%) unemployment taxes. All earnings are subject to social security tax of 6.0% and Medicare tax of 1.5%. Required: (a) Journalize the entry to record the accrual of payroll.* (b) Journalize the entry to record the accrual of payroll taxes.* *Refer to the Chart of Accounts for exact wording...
Debit Credit 2019 (Adjustment a) Dec. 31 Uncollectible Accounts Expense 3,640.00 Allowance for Doubtful Accounts 3,640.00...
Debit Credit 2019 (Adjustment a) Dec. 31 Uncollectible Accounts Expense 3,640.00 Allowance for Doubtful Accounts 3,640.00 To record estimated loss from Uncollectible accounts based on 0.5% of net credit sales, $728,000 (Adjustment b) 31 Supplies Expense 5,000.00 Supplies 5,000.00 To record supplies used during the year (Adjustment c) 31 Insurance Expense 1,440.00 Prepaid Insurance 1,440.00 To record expired insurance on 1-year $5,760 policy purchased on Oct. 1 (Adjustment d) 31 Depreciation. Exp.—Store Equipment 14,600.00 Accum. Depreciation—Store Equip. 14,600.00 To record...
The payroll register for Gamble Company for the week ended April 29 indicated the following: Salaries...
The payroll register for Gamble Company for the week ended April 29 indicated the following: Salaries $1,420,000 Social security tax withheld 85,200 Medicare tax withheld 21,300 Federal income tax withheld 284,000 In addition, state and federal unemployment taxes were calculated at the rate of 5.4% and 0.6%, respectively, on $266,000 of salaries. Required: A. Journalize the entry to record the payroll for the week of April 29.* B. Journalize the entry to record the payroll tax expense incurred for the...
Record Payroll Expense and Payroll Tax Expense The following totals for the month of September were...
Record Payroll Expense and Payroll Tax Expense The following totals for the month of September were taken from the payroll register of Mindless Company. Use this information to answer questions 6 and 7. Salaries                           $24,000       Federal income taxes withheld      5,000 FICA taxes withheld                       1,100       Federal Unemployment Taxes            64 State Unemployment Taxes              432 6. What is the journal entry to record the monthly payroll expense on September 30? a. Increase Salaries and Wages Expense $24,000; Decrease...
On January 1, 2022, the ledger of Oriole Company contained these liability accounts. Accounts Payable $43,000...
On January 1, 2022, the ledger of Oriole Company contained these liability accounts. Accounts Payable $43,000 Sales Taxes Payable 7,100 Unearned Service Revenue 19,500 During January, the following selected transactions occurred. Jan. 1 Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note. 5 Sold merchandise for cash totaling $5,724, which includes 6% sales taxes. 12 Performed services for customers who had made advance payments of $10,400. (Credit Service Revenue.) 14 Paid state treasurer’s department for sales...
Given the following information: Accounts Receivable at 1 July 2017    30,000 Accounts Receivable at 30...
Given the following information: Accounts Receivable at 1 July 2017    30,000 Accounts Receivable at 30 June 2018 27,000 Receipts on account for the year to 30 June 2018 98,000 Calculate Credit Sales for the year to 30 June 2018: Do not use any punctuation or symbols in the answer. Answer: Part B Select the most appropriate account to be debited for the following transactions. Note that an account may be used more than once or not at all. Paid...