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 Debit $ 560,000 65,000 25,000 125,000 20,000 143,000 2,000 Account Titles Cash and cash equivalents Accounts receivable Supplies Product inventory Prepaid insurance Equipment Other non-current assets, net Accumulated depreciation Accounts payable Interest payable Rent payable Wages payable Property tax payable Long term notes payable Capital Retained earnings $ 21,000 25,000 0 0 7,000 12,000 30,000 500,000 345,000 $ 940,000 $ 940,000 The following transactions occurred during the financial year 2020 a. A retail pool customer pays his outstanding balance of $9,000 to Pool Corporation b. Supplies purchased in Cash amounting $580. c. Pool Corporation purchases Product Inventory in Cash amounting to $5,600 d. Paid wages in cash amounting to $9100 e. Pool Corporation purchased equipment worth $6,000 and paid immediately. f. Pool Corporation paid $2,400 cash for the premium on a 12th month insurance policy beginning from December 2020. g. Pool Corporation paid $200 towards general repairs in cash. h. Pool Corporation paid $3,700 cash towards Utilities 1. Pool Corporation paid $260 towards transportation for one of the equipment as per the sale agreement. 1. Pool Corporation purchased Product Inventory for $29.000 Cash. k. Pool Corporation owed $900 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 Pool Corporation received a $620 utility bill for December utility usage. It will be paid in January 2021 n. Pool Corporation borrowed $31,500 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 $12,000, but the service was not yet recorded on December 31 p. On August 1, 2020, Pool Corporation purchased a two-year Insurance policy for $5,160, with coverage beginning on that date q. During 2020. Pool Corporation purchased supplies costing $21.000 from various suppliers for cash. 1. Pool Corporation estimated that depreciation on its buildings and equipment was $8,300 for the year. s At December 31, 2020, $1,300 of interest on investments was earned that will be received in 2021 t. Rent for December due to be paid in January 2020 of $1,600. u. Sold $41,000 of goods and received the amount on the same day. v. Record the expired insurance purchased (trans.) for the month of December w Sales worth $20,000 made to Penny's Pool Service & Supply Inc on Credit x. Pool Corporation received utilities bill for $510 for December. Pald in cash when received. y. Property tax paid $10,300 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") 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") c3 Paid for the equipment purchased (tran. A1) 04. On December 31, 2020, Pool Corporation had $26,000 of pool cleaning supplies on hand Record the necessary adjusting entry e5. Property tax due and payable worth $14,000. e6. Recognize revenue earned (transaction L) e7 Record interest accrued on bank loan (Transaction N) e8. Record the adjusting entry to record expired insurance (Transaction P), 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.) 4. Prepare Income Statement. Pool Corporation Income Statement For year ended December 31, 2020 Revenue: Expenses 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 Debit $ 560,000 65,000 25,000 125,000 20,000 143,000 2,000 Account Titles Cash and cash equivalents Accounts receivable Supplies Product inventory Prepaid insurance Equipment Other non-current assets, net Accumulated depreciation Accounts payable Interest payable Rent payable Wages payable Property tax payable Long term notes payable Capital Retained earnings $ 21,000 25,000 0 0 7,000 12,000 30,000 500,000 345,000 $ 940,000 $ 940,000 The following transactions occurred during the financial year 2020 a. A retail pool customer pays his outstanding balance of $9,000 to Pool Corporation b. Supplies purchased in Cash amounting $580. c. Pool Corporation purchases Product Inventory in Cash amounting to $5,600 d. Paid wages in cash amounting to $9100 e. Pool Corporation purchased equipment worth $6,000 and paid immediately. f. Pool Corporation paid $2,400 cash for the premium on a 12th month insurance policy beginning from December 2020. g. Pool Corporation paid $200 towards general repairs in cash. h. Pool Corporation paid $3,700 cash towards Utilities 1. Pool Corporation paid $260 towards transportation for one of the equipment as per the sale agreement. 1. Pool Corporation purchased Product Inventory for $29.000 Cash. k. Pool Corporation owed $900 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 Pool Corporation received a $620 utility bill for December utility usage. It will be paid in January 2021 n. Pool Corporation borrowed $31,500 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 $12,000, but the service was not yet recorded on December 31 p. On August 1, 2020, Pool Corporation purchased a two-year Insurance policy for $5,160, with coverage beginning on that date q. During 2020. Pool Corporation purchased supplies costing $21.000 from various suppliers for cash. 1. Pool Corporation estimated that depreciation on its buildings and equipment was $8,300 for the year. s At December 31, 2020, $1,300 of interest on investments was earned that will be received in 2021 t. Rent for December due to be paid in January 2020 of $1,600. u. Sold $41,000 of goods and received the amount on the same day. v. Record the expired insurance purchased (trans.) for the month of December w Sales worth $20,000 made to Penny's Pool Service & Supply Inc on Credit x. Pool Corporation received utilities bill for $510 for December. Pald in cash when received. y. Property tax paid $10,300 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") 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") c3 Paid for the equipment purchased (tran. A1) 04. On December 31, 2020, Pool Corporation had $26,000 of pool cleaning supplies on hand Record the necessary adjusting entry e5. Property tax due and payable worth $14,000. e6. Recognize revenue earned (transaction L) e7 Record interest accrued on bank loan (Transaction N) e8. Record the adjusting entry to record expired insurance (Transaction P), 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.) 4. Prepare Income Statement. Pool Corporation Income Statement For year ended December 31, 2020 Revenue: Expenses