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Sample Questlon: 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:

The following transactions occurred during the financial year $2020$ :

a$.$ A retail pool customer pays his outstanding balance of $$16,000$ to Pool Corporation.

b$.$ Supplies purchased in Cash amounting $$630.$

c$.$ Pool Corporation purchases Product Inventory in Cash amounting to $$4,800.$

d$.$ Paid wages in cash amounting to $$9\mathrm{.}900.$

e$.$ Pool Corporation purchased equipment worth $$6\mathrm{.}000$ and paid immediately.

f$.$ Pool Corporation paid $$2,400$ cash for the premium on a $12$ th 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.

i$.$ Pool Corporation paid $$130$ towards transportation for one of the equipment as per the sale agreement.

j$.$ Pool Corporation purchased Product Inventory for $$23,000$ Cash.

k$.$ Pool Corporation owed $$1,000$ wages to the office receptionist and three assistants for working the last two days in December

The employees will be paid in January $2021.$

I. 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 $$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 $$12,500,$ 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 $$23,000$ from various suppliers for cash.

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 $$1,800.$

u$.$ Sold $$53,000$ 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 $$15\mathrm{.}000$ made to Penny's Pool Service & Supply Inc. on Credit.

x$.$ Pool Corporation received utilities bill for $$530$ for December. Paid in cash when received.

y$.$ Property tax paid $$9,500$ during the year.

z$.$ Received partial payment from Penny's Pool Service & Supply Inc amounting to $$7,500$ for the purchase made this year. $($tras$."$W$")$

a$1.$ Pool Corporation purchased equipment worth $$5,000$ on credit basis.

b$2.$ Pool Corporation received the remaining balance amount due towards the recent sale made to Penny's Pool Service & Supply Inc.

$($trans $"$w$")$

c$3.$ Paid for the equipment purchased. $($tran$.$ A$1)$

d$4.$ On December $31,2020.$ Pool Corporation had $$24,000$ of pool cleaning supplies on hand. Record the necessary adjusting entry.

e$5.$ Property tax due and payable worth $$13,000.$

e$6.$ Recognize revenue earned $($transaction $L)$

e$7.$ Record interest accrued on bank loan $($Transaction N$).$

e$8.$ Record the adjusting entry to record expired insurance $($Transaction P$).$

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