Question & Answer: The general ledger of Ziper storage Solution at December 22, 2017 is provided. Zips Stora…..

The general ledger of Ziper storage Solution at December 22, 2017 is provided. Zips Storage uses a perpetual inventory system.

Trial balance:

Debit Credit
Cash 39,970
Accounts Receivvable 27,900
Allowance for Uncollectible Account 100
Supplies 6000
Prepaid Insurance 12,000
Inventory 83,230
Equipment 36,000
Accumlated Depreciation 80,000
Accounts Payable 6,700
Notes Payable 10,000
Interest Payable
Common stock 100,000
Retained Earning 17,200
Dividends 2,000
Sales 1,009,300
Cost of goods Sold 803,000
Salaries Expense 100,000
Bad Debt Expense
Depreciation Expense, Equipment
Supplies Expense
Insurance Expense
Interest Expense
Operation Expense 36,000
Income Tax Expense 5,000
1,151,200 1,151,200
Net Income (Loss)

The follwing are the balance of the transaction for the month of Decenber:

December 22 Purcased inventory for $14,100 on account, terms 2/10, N/30.

December 24 Returned $600 of inventory purchased 12/22 due to a problem with the order.

December 27 Paid for the inventory purchased on 12/22.

December 28 Sold 600 storage bins at a price of $6 each with a cost of $5 per bin.

December 30 Wrote-off an account for a customer who declared bankruptcy, $1,100.


1. Record each of the summary transaction listed above.

2. Post the transactions to the accounts.

3. Complete the worksheet. Insurance expired during the year is $5,000. Supplies remaining on hand at the end of the year equal $2,000. Depreciation on the equipment of $2,000. Zips Storage Solution estimates the percentage of uncollectible account to be 30% of the receivables. The note payable is 6%, 2-year note dated 6/1/2016.

4. Journalize the necessary adjucting entries.

5. Post the adjusting entries.

6. Complete the income statement, statement of stockholder’s equity and classified balance sheet as of December 32, 2018.

7. Record the closing entries.

8. Post the closing entries.

9. Complete a post-closing trial balance.

Expert Answer


1) Recording of summary transaction

Date General Journal Debit Credit
Dec.22 Inventory $14,100
Accounts Payable $14,100
Dec.24 Accounts Payable $600
   Inventory $600
Dec.27 Accounts Payable $13,500
Cash $13,230
Cash Discount Received

((14,100 – 600)*2%)

Dec.28 Accounts Receivable $3,600
Sales Revenue (600*6) $3,600
Dec.28 Cost of Goods Sold (600*5) $3,000
   Inventory $3,000
Dec.30 Allowance for Uncollectible Account $1,100
   Accounts Receivable $1,100

2) Posting of transaction

Allowance for Uncollectible Account
Debit Credit
Account Receivable $1,100 100 Beg Balance
Debit Credit
Balance on Dec.22 83230 600 Dec.24 Return
Dec.22 Purchase 14100 3000 Cost of Goods Sold
Accounts Payable
Debit Credit
Dec.24 Return 600 6700 Beginning Bal
Dec.27 Payment 13500 14100 Dec.22 Purchase
270 Cash Discount
Accounts Receivable
Debit Credit
Beg. Bal 27900 1100 Allowance for Uncollectible Account
Dec.28 Sales Revenue 3600
Cost of Goods Sold
Debit Credit
Beg Balance 803000
Inventory 3000
Debit Credit
Beg. Balance 39970 13230 Dec.27 Accounts Payable
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