Sample Question: Complex Category Pool Corporation is the world's largest wholesale distributor of swimming pool supplies and equipment & services. It sells these products to swimming pool repair and service businesses like Penny's Pool Service & Supply Inc., swimming pool builders, and retail swimming pool stores. The majority of these customers are small, family-owned businesses like Penny's. Its trial balance for the last year ended December 31, 2019 is presented below: Account Titles Debit Credit Cash and cash equivalents $1,382,650 Account Receivables 110,555 Supplies 25,400 Product inventories 500,000 Prepaid Insurance 78,000 Equipments 110,994 Other non-current assets, net 30,386 Accumulated Depreciation $ 16,650 Accounts payable 114,740 Wages payable 50,800 Property tax payable 94,719 Long term notes payable 34,000 Capital 1, 172,550 Retained earnings, January 1 754,526 $2,237,985 $2,237,985 5 The following transactions occurred during the financial year 2020: a. A retail pool customer pays his outstanding balance of $1,000 to Pool Corporation. b. Supplies purchased in Cash amounting $550. c. Pool Corporation purchases Product Inventory in Cash amounting to $5,000. d. Wages paid amounting to $8,000. e. Pool Corporation purchased equipment worth $5,000 and paid immediately. . The company paid $2,400 cash for the premium on a 12th month insurance policy beginning from December 2020. g. Pool company paid $200 towards general repairs in cash. h. The company paid $300 cash towards Utilities. I. Pool Company paid $120 towards transportation for one of the equipment as per the sale agreement. j. Company purchased Equipments (product Inventory) for sale amounting to $25,000 and paid in Cash. k. Pool corporation owed $800 wages to the office receptionist and three assistants for working the last two days in December 2020. The employees will be paid in January 2021. 1. On October 1, 2020, Pool Corporation received $24,000 from customers who prepaid pool cleaning service for one year beginning on November 1, 2020. m. The company received a $520 utility bill for December utility usage. It will be paid in January 2021. n. Pool Corporation borrowed $30,000 from a local bank on May 1, 2020, signing a note with a 6 percent interest rate. The note and interest are due on May 1, 2021. o. On December 31, 2020, Pool Corporation cleaned and winterized a customer's pool for $1,200, but the service was not yet recorded on December 31. p. On August 1, 2020, Pool Corporation purchased a two-year insurance policy for $4,200, with coverage beginning on that date. The amount was recorded as prepaid insurance when paid. 4. On December 31, 2020, Pool Corporation had $3,100 of pool cleaning supplies on hand. During 2020, Pool Corporation purchased supplies costing $23,000 from ABC Corporation, had $2,400 of supplies on hand on December 31, 2019. r. Pool Corporation estimated that depreciation on its buildings and equipment was $8,300 for the year. S. At December 31, 2020, $1,500 of interest on investments was earned that will be received in 2021. t. Rent for December due to be paid in January 2020 of $2,000. u. Sold $50,000 of goods and received the amount on the same day. v. Record the expired insurance purchased (trans. f) for the month of December w. Sale of worth $20,000 made to Penny's Pool Service & Supply Inc. on Credit. X. The company paid $500 cash towards Utilities. y. Property tax paid $10,000 during the year. n. ne company paid JUU can towards cultes. i. Pool Company paid $120 towards transportation for one of the equipment as per the sale agreement. 1. Company purchased Equipments (product Inventory) for sale amounting to $25,000 and paid in Cash. k. Pool corporation owed $800 wages to the office receptionist and three assistants for working the last two days in December 2020. The employees will be paid in January 2021. 1. On October 1, 2020, Pool Corporation received $24,000 from customers who prepaid pool cleaning service for one year beginning on November 1, 2020. m. The company received a $520 utility bill for December utility usage. It will be paid in January 2021. n. Pool Corporation borrowed $30,000 from a local bank on May 1, 2020, signing a note with a 6 percent interest rate. The note and interest are due on May 1, 2021. o. On December 31, 2020, Pool Corporation cleaned and winterized a customer's pool for $1,200, but the service was not yet recorded on December 31 p. On August 1, 2020, Pool Corporation purchased a two-year insurance policy for $4,200, with coverage beginning on that date. The amount was recorded as prepaid insurance when paid. 4. On December 31, 2020, Pool Corporation had $3,100 of pool cleaning supplies on hand. During 2020, Pool Corporation purchased supplies costing $23,000 from ABC Corporation, had $2,400 of supplies on hand on December 31, 2019. Pool Corporation estimated that depreciation on its buildings and equipment was $8,300 for the year. s. At December 31, 2020, $1,500 of interest on investments was earned that will be received in 2021. t. Rent for December due to be paid in January 2020 of $2,000, u. Sold $50,000 of goods and received the amount on the same day. v. Record the expired insurance purchased (trans. f) for the month of December. w. Sale of worth $20,000 made to Penny's Pool Service & Supply Inc. on Credit. X. The company paid $500 cash towards Utilities y. Property tax paid $10,000 during the year. 2. Received partial payment from Penny's Pool Service & Supply Inc amounting to $10,000 for the purchase made this year. (tras."" at. Pool Corporation purchased equipment worth $5,000 on credit basis. b2. Pool Corporation received the remaining balance amount due towards the recent sale made to Penny's Pool Service & Supply Inc. (trans "w") c3. Paid for the equipment purchased. (tran. A1) d4. Supplies purchased in Cash amounting $550 at the end of December 2020. e5. Property tax due and payable worth $13,000. e6. Recognize revenue earned (transaction L) Required: 1. Post the required entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 33 Record the $1,000 cash received from customer. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general journal 1 Record the $1,000 cash received from customer. 2 Record the $550 supplies purchased for Cash. 3 Record the $5,000 Product Inventory purchased for Cash. 4 Record the $8,000 wages paid. 5 Record the $5,000 equipment purchased for cash. 6 Record the $2,400 cash payment of premium on a 12th month insurance policy beginning from December 2020. 7 Record the $200 cash payment towards general repairs. 8 Record the $300 cash payment towards Utilities. 9 Record the $120 paid for transportation for one of the equipment as per the sale agreement. 10 Record the $25,000 cash payment for purchase of Equipments for sale. 11 Record the $800 wages owed to the office receptionist and three assistants for working the last two days in December 2020 to be paid in January 2021. 12 Record the $24,000 cash received on October 1, 2020 from customers who prepaid pool cleaning service for one year beginning on November 1, 2020. Note : = journal entry has been entered V. ---- 13 Record the $520 utility bill for December utility usage to be paid in January 2021. 14 Record the $30,000 borrowed from a local bank on May 1, 2020 with a 6% interest rate. The note and interest are due on May 1, 2021. 15 Record the $1,200 receivable for cleaning and winterizing a pool on December 31, 2020 not yet recorded. 16 Record the $4,200 purchase of a two-year insurance policy on August 1, 2020 with coverage beginning on that date. / 17 Record the $23,000 purchase of supplies during 2020 while it had $3,100 pool cleaning supplies on hand as at December 31, 2020 and $2,400 on December 31, 2019. 18 Record the $8,300 estimated depreciation on its buildings and equipment for the year. 19 Record the $1,500 interest on investments earned in 2020 but will be received only in 2021. 20 Record the $2,000 rent for December payable in January 2020. 21 Record the $50,000 sale of goods for cash. 22 Record the insurance expense for December 2020. Note : = journal entry has been entered 23 Record the $20,000 Sale of worth made to Penny's Pool Service & Supply Inc. on Credit. 24 Record the $500 cash company paid towards Utilities. 25 Record the $10,000 Property tax paid during the year. 26 Record the $10,000 received on partial payment from Penny's Pool Service & Supply Inc for the purchase made this year. (tras."w") 27 Record the $5,000 Pool Corporation purchased equipment worth $5,000 on credit basis. 28 Record the recent sale made to Penny's Pool Service & - Supply Inc. (trans "w") 28 Record the recent sale made to Penny's Pool Service & - Supply Inc. (trans "w") 29 Record the equipment purchased. (tran. A1) 30 Record the $550 supplies purchased in Cash amounting at the end of December 2020. 31 Record the $1300 property tax due and payable. 32 Recognize revenue earned (transaction L) 33 Description ew transaction list Journal entry worksheet 7 8 5 6