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 lnc., 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 CI Cash and cash equivalents $ 560,000 Accounts receivable 65,000 Supplies 25,000 Product inventory 125,000 Prepaid insurance 20,000 Equipment 143,000 Other noncurrent assets, net 2,000 Accumulated depreciation $ 2 Accounts payable 2 Interest payable Rent payable Wages payable Property tax payable 1 Long term notes payable 2 Capital 5t Retained earnings 31 $ 940,000 $ 9: The following transactions occurred during the financial year 2020: a. A retail pool customer pays his outstanding balance of $8,400 to Pool Corporation. b. Supplies purchased in Cash amounting $610. c. Pool Corporation purchases Product Inventory in Cash amounting to $41,300. d. Paid wages in cash amounting to $11,400. e. Pool Corporation purchased equipment worth $18,000 and paid immediately. f. Pool Corporation paid $2,400 cash for the premium on a 12th month insurance policy beginning from December 2020. 9. Pool Corporation paid $200 towards general repairs in cash. h. Pool Corporation paid $4,100 cash towards Utilities. i. Pool Corporation paid $270 towards transportation for one of the equipment as per the sale agreement. j. Pool Corporation purchased Product Inventory for $27,000 Cash. k. Pool Corporation owed $1,100 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. 0, Pool Corporation received $24,000 from customers who ' November 1, 2020. 'ce for one year beginning on ber utility usage. It will be JO! IUCII y LUL l. I. On October 1, 202 paid in January 2021. _ . n. Pool Corporation borrowed $27,100 from a local bank on May 1, 2020, Signing a The note and interest are due on May 1, 2021. note with a 6 percent interest rate. 0. On December 31, 2020, Pool Corporation cleaned and winterized a customers pool for $11,300, but the service was not yet recorded on December 31. p. On August 1, 2020, Pool Corporation purchased a two-year insurance policy for $3,000, with coverage beginning on that date. q. During 2020, Pool Corporation purchased supplies costing $21,000 from various suppliers for cash. r. Pool Corporation estimated that depreciation on its buildings and equipment was $9,000 for the year. 5. At December 31, 2020, $1,600 of interes received in 2021. t. Rent for December due to be paid in January 2020 of $1,900. u. Sold $17,000 of goods and received the amount on the same day. v. Record the expired insurance purchased (trans. f) for the month of December. w. Sales worth $39,000 made to Penny's Pool Service & Supply Inc. on Credit. x. Pool Corporation received utilities bill for $500 for December. Paid in cash when received. y. Property tax paid $3,000 during the year. 2. Received partial payment from Penny's Pool Service & Supply lnc amounting to $17,500 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") 7 c3. Paid for the equipment purchased. (tran. A1) d4. On December 31, 2020, Pool Corporation had $22,000 of pool cleaning supplies , on hand. Record the necessary adjusting entry. 7 ' 7 e5. Property tax due and payable worth $12,000. 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). ton investments was earned that will be Required: . 1. Post the required entries (If no entr ' ' . \" . - ' ' y '5 re(Slurred for a transaction/event s I 'No Journal entry Iiii-'Cll-Iired" in the first account field.) 7 ' e ect int View transaction list nces Journal entry worksheet LO OO m 34 Record the $8,400 cash received from customer. Note: Enter debits before credits . Transaction General Journal Debit Credit Record entry Clear entry View general journint View transaction list ices Journal entry worksheet LO CO m 34 Record the $610 supplies purchased for Cash. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journPrint View transaction list L ferences Journal entry worksheet LO V . .... 34 Record the $41,300 Product Inventory purchased for Cash. Note: Enter debits before credits. Transaction General Journal Debit Credit O Record entry Clear entry View general journView transaction list Journal entry worksheet CO LO 8 .. . . . 34 N Record the $11,400 wages paid. Note: Enter debits before credits . Transaction General Journal Debit Credit Record entry Clear entry View general journ\fView transaction list Journal entry worksheet OO LO V w 3 . .. .. 34 Pool Corporation paid $2,400 cash for the premium on a 12th month insurance policy beginning from December 2020. Note: Enter debits before credits. Transaction General Journal Debit Credit 4- Record entry Clear entry View general journView transaction list Journal entry worksheet LO 34 Pool Corporation paid $200 towards general repairs in cash. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalPost the required entries. (If no entry is required for a transaction lo journal entry required" in the first account field.) View transaction list Journal entry worksheet CO V LO OO N 34 Pool Corporation paid $4,100 cash towards Utilities. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalView transaction list Journal entry worksheet LO CO 34 Pool Corporation paid $270 towards transportation for one of the equipment as per the sale agreement. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalPrint Journal entry worksheet ences LO 00 Pool Corporation purchased Product Inventory for $27,000 Cash. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalJournal entry worksheet ces 34 Record the $1,100 wages owed to the office receptionist and three assistants for working the last two days in December 2020 to be paid in January 2021. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journaJournal entry worksheet OO N 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: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journJournal entry worksheet Pool Corporation received a $760 utility bill for December utility usage. It will be paid in January 2021. Note: Enter debits before credits. Transaction General Journal Debit Credit E Record entry Clear entry View general journJournal entry worksheet V F N Record the $27,100 borrowed from a local bank on May 1, 2020 with a 6% interest rate. The note and interest are due on May 1, 2021. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journaJournal entry worksheet O Record the $11,300 receivable for cleaning and winterizing a pool on December 31, 2020 not yet recorded. Note: Enter debits before credits. Transaction General Journal Debit Credit O Record entry Clear entry View general journalJournal entry worksheet V F N 1.. . Record the $3,000 purchase of a two-year insurance policy on August 1, 2020 with coverage beginning on that date. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalView transaction list Journal entry worksheet V . . . . . A Record the purchase of supplies costing $21,000 from various suppliers for cash during 2020. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal\fJournal entry worksheet D 0o Record the $1,600 interest on investments earned in 2020 but will be received only in 2021. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalJournal entry worksheet V 0O 34 A Record the $1,900 rent for December payable in January 2020. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalJournal entry worksheet 0o 20 34 Record the $17,000 sale of goods for cash. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalJournal entry worksheet V 0O 22 Record the insurance expense for December 2020. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal\fJournal entry worksheet Pool Corporation received utilities bill for $500 for December. Paid in cash when received. Note: Enter debits before credits . Transaction General Journal Debit Credit X Record entry Clear entry View general journalJournal entry worksheet . . . . . 20 34 Record the $3,000 Property tax paid during the year. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalJournal entry worksheet 25 34 Record the $17,500 received on partial payment from Penny's Pool Service & - Supply Inc for the purchase made this year. (tras."w") Note: Enter debits before credits. Transaction General Journal Debit Credit N Record entry Clear entry View general journalJournal entry worksheet 22 26 . . Record the $5,000 Pool Corporation purchased equipment worth $5,000 on credit basis. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalJournal entry worksheet V 1... 23 24 LO 26 28 Record the recent sale made to Penny's Pool Service & Supply Inc. (trans "w") Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal\fJournal entry worksheet 29 34 Record the necessary adjusting entry for transaction on December 31, 2020, Pool Corporation had $22,000 of pool cleaning supplies on hand. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalJournal entry worksheet V Record the $12,000 property tax due and payable. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalJournal entry worksheet 30 . . . . 34 Recognize revenue earned (transaction L) Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalJournal entry worksheet 29 32 Record interest accrued on loan (Transaction N) Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalJournal entry worksheet V m 33 Record the adjusting entry to record expired insurance (Transaction P). Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal