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 Cash and cash equivalents Credit $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 $ 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. 1. 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. 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. 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. 9. 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."W") al. 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") 4. un vecember 31, ZUZU, PODI Corporauon nad ,IVU O pool cleaning supplies on nanu. During ZUZU, MOOI Corporauon purchased supplies costing $23,000 from ABC Corporation, had $2,400 of supplies on hand on December 31, 2019. t. Pool Corporation estimated that depreciation on its buildings and equipment was $8,300 for the ye 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. z. Received partial payment from Penny's Pool Service & Supply Inc amounting to $10,000 for the purchase made this year. (tras."W") a1. 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) 6. Prepare Balance Sheet. (Input all amounts as positive values.) Pool Corporation Balance Sheet For year ended December 31, 2020 Assets Current Assets Total Current Assets Non-Current Assets Total Non-Current Assets Total Assets Liabilities Current Liabilities Total Non-Current Assets Total Assets Liabilities Current Liabilities Total Current Liabilities Non-Current Liabilities Total Non-Current liabilities Total Liabilities Owner's Equity Total Owner's Equity Total Liabilities & Equity 7. Post the closing 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 A B Record the closure of income accounts. Note: Enter debits before credits Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal 7. Post the closing entries. (If no entry is required for a transaction/event, select "No journal entry required" in the field.) Journal entry worksheet B Record the closure of expense accounts. Note: Enter debits before credits. Transaction General Journal Debit Credit 2 7. Post the closing 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 B Record the transfer of net income to retained earnings account. Note: Enter debits before credits. General Journal Debit Credit Transaction 3 Record entry Clear entry View general journal 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 14,740 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 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. 1. 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 L. 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. t. 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. a1. 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') See Next 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. 9. 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. 1. 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."w") a1. 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) 04. 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)