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: Credit Account Titles Cash and cash equivalents Account Receivables Supplies Product inventories Prepaid Insurance Equipments Other non-current assets, net Accumulated Depreciation Accounts payable Wages payable Property tax payable Long term notes payable Capital Retained earnings, January 1 Debit $1,382,650 118,555 25,480 500,000 78,000 110,994 30,386 $ 16,650 114,740 50,800 94,719 34,000 1,172,550 754,526 $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. f. 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. 1. 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. q. 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. 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 remaining balance amount due tou 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) 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.) 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 8 33 > Record the $1,000 cash received from customer. Note: Enter debits before credite Credit Transaction a General Journal Cash Account receivables Debit 1.000 1,000 Record entry Clear entay View general journal 2. Post the entries and their balances to their respective T-accounts Cash and Cash equivalents Account Receivables Bag bal Beg bal End. bal End bal Supplies Product inventories, nel Beg bal Beg bal End bal End bal Prepaid Insurance Equipments Beg bal Beg bal End, bal End bal Other non current assets, net Accounts payable Beg. bal Beg bal End bal End. bal Supplies Product inventories, net Beg bal. Beg. bal. End. bal. End, bal Prepaid Insurance Equipments Beg. bal. Beg. bal. End. bal. End. bal. Other non-current assets, net Accounts payable Beg. bal. Beg bal. End. bal. End, bal Interest payable Rent payable Beg. bal Beg. bal End, bal End, bal Wages payable Property tax payable Beg. bal Beg. bal. End, bal End, bal Long term notes payable Capital Beg. bal Beg bal. End, bal. End. bal Retained earnings, January 1 Supplies expense Beg. bal. Beg. bal. End. bal. End. bal. Depreciation expenses Sales Beg. bal. Beg. bal. End. bal. End, bal. Deferred revenue Accumulated depreciation Beg. bal. Beg. bal. End, bal. End, bal Wages expenses Insurance expenses Beg. bal. Beg. Bal End. bal. End. Bal. Rent expenses Interest revenue Beg. bal. Beg bal. End. bal End, bal Interest receivable Repair expenses Beg. bal. Beg. bal. End. bal. End. bal. Transportation expense Utilities payable Beg. bal. Beg. bal End. bal End, bal Interest expense Utilities expenses Beg. bal Beg. bal. End, bal. End. bal Property tax expenses Beg. bal. End. bal. . Prepare Adjusted Trial Balance. Pool Corporation Adjusted trial balance For year ended December 31, 2020 Account Title Debit Credit Total $ 0 $ 0 2. Prepare Income Statement. Pool Corporation Income Statement For year ended December 31, 2020 Revenue: $ 0 Expenses 0 $ 5. Prepare Statement of Owner's Equity. Pool Corporation Statement of Owner's equity For year ended December 31, 2020 Capital 0 Ending $ 0 5. Prepare Balance Sheet. (Input all amounts as positive values.) Pool Corporation Balance Sheet For year ended December 31, 2020 Assets Current Assets 6. Prepare Balance Sheet. (Input all amounts as positive values.) Pool Corporation Balance Sheet For year ended December 31, 2020 Assets Current Assets $ 0 Total Current Assets Non-Current Assets $ 0 Total Non-Current Assets Total Assets Liabilities $ 0 Current Liabilities $ 0 Total Current Liabilities Non-Current Liabilities $ 0 Total Non-Current liabilities Total Liabilities Owner's Equity $ 0 $ 0 Total Owner's Equity Total Liabilities & Equity $ 0 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 closure of income accounts. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 7. Post the closing entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Record the closure of expense accounts. Note: Enter debits before credits. Transaction General Journal Debit Credit 2 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 first account field.) View transaction list Journal entry worksheet Record the transfer of net income to retained earnings account. Note: Enter debits before credits. Transaction General Journal Debit Credit 3 Record entry Clear entry View general journal