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The trial balance for a company that sells alarms, as of January 1, 2016 had the following balances:
Cash 74,000
Accounts receivable 13,000
Supplies 200
Prepaid rent 3,200
Merchandise inventory (24 @ $200; 1 @ $200) 5,000
Land 4000
Accounts payable 1,900
Unearned revenue 900
Salaries payable 1,000
Common stock 50,000
Retained earnings 47,000
The following transactions took place during 2016:
1. Paid the salaries payable from 2015.
2. Paid $4,800 on May 1, 2016, for one year's lease on the company van in advance.
3. Paid $7,200 on May 2,2016 for one year's office rent in advance.
4. Purchased $400 of supplies on account.
5. Purchased 100 alarm systems for $28,000 cash during the year.
6. Sold 102 alarm systems for $57,000. All sales were on account.
(Compute cost of goods sold using the FIFO cost flow method)
7. Paid $2,100 on accounts payable during the year.
8. Billed $52,000 of monitoring services for the year.
9. Paid installers and other employees a total of $25,000 cash for salaries.
10. Collected $89,000 of accounts receivable during the year.
11. Paid $3,600 of advertising expense during the year.
12. Paid $2,500 of utilities expense for the year.
13. Paid a dividend of $10,000 to the shareholders.
1. Prepare the trial balance as at Dec 31, 2016 for the company
2. Prepare the income statement and balance sheet for the company.
| Account | Jan 1 Balance | | | | | | Dec 31 balance |
| Cash | | | | | | | |
| AR | | | | | | | |
| Supplies | | | | | | | |
| Prepaid Rent | | | | | | | |
| Inventory | | | | | | | |
| Land | | | | | | | |
| AP | | | | | | | |
| Unearned Revenue | | | | | | | |
| Salaries Payable | | | | | | | |
| Common Stock | | | | | | | |
| Retained Earnings | | | | | | |
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