Page 161 CON3-1 Accounting for Operating Activities in a New Business (the Accounting Cycle) 103-4, 3-5, 3-6 Penny's Pool Service & Supply, Inc. (PPSS), had the following transactions related to operating the business in its first year's busiest quarter ended September 30: a. Placed and paid for $2,600 in advertisements with several area newspapers (including the online versions), all of which ran in the newspapers during the quarter. b. Cleaned pools for customers for $19,200, receiving $16,000 in cash with the rest owed by customers who will pay when billed in October. c. Paid Pool Corporation, Inc., a pool supply wholesaler, $10,600 for inventory received by PPSS in May. d. As an incentive to maintain customer loyalty, PPSS offered customers a discount for prepaying next year's pool cleaning service. PPSS received $10,000 from customers who took advantage of the discount. e. Paid the office receptionist $4,500, with $1,500 owed from work in the prior quarter and the rest from work in the current quarter. Last quarter's amount was recorded as an expense and a liability, Wages Payable. f. Had the company van repaired, paying $310 to the mechanic. g. Paid $220 for phone, water, and electric utilities used during the quarter. h. Received $75 cash in interest earned during the current quarter on short-term investments. i. Received a property tax bill for $600 for use of the land and building in the quarter; the bill will be paid next quarter. j. Paid $2,400 for the next quarter's insurance coverage.