Question

Required information The general ledger of Zips Storage at January 1, 2021, includes the following account balances: Credits Debits $ 26,600 17,400 16,000 168,000 Accounts Cash Accounts Receivable Prepaid Insurance Land Accounts Payable Deferred Revenue Common Stock Retained Earnings Totals $ 8,700 7,800 163,000 48,500 $228,000 $228,000 The following is a summary of the transactions for the year: 1. January 9 Provide storage services for cash, $154,100, and on account, $62,200. 2. February 12 Collect on accounts receivable, $53,500. 3. April 25 Receive cash in advance from customers, $14,900. 4. May 6 Purchase supplies on account, $13,200. 5. July 15 Pay property taxes, $10,500. 6. September 10 Pay on accounts payable, $13,400. 7. October 31 Pay salaries, $143,600. 8. November 20 Issue shares of common stock in exchange for $47,000 cash. 9. December 30 Pay $4,800 cash dividends to stockholders. -3. 6. & 10. Post the transactions, adjusting entries and closing entries to the T-accounts. Be sure to include beginning balances.

Answer 1

Closing Enteries Date Particulars Debit in $ Credit in $ 31.12.2021 Income Summary a/c Dr. 171400 To Property Tax Expense 10500 To Salaries and wages expense 143600 To Insurance Expense 9000 To Supplies Expense 8300 (Expense accounts closed) 230100 31.12.2021 Service Revenue a/c Dr. To income Summary (Revenue accounts closed) 230100 58700 31.12.2021 Income Summary a/c Dr. To Retained Earnings (Profits transferred) 58700 4800 31.12.2021 Retained Earnings a/c Dr. To Dividends (Dividends charged to Retained earnings) 4800

Bal Common Stock Bal. 210000 Cash 210000 Bal 10500 13400 143600 4800 163000 47000 210000 Service Revenue Accounts Receivable Deferred Revenue Common Stock Cash 26600 Property Tax Expense 154100 Accounts Payable 53500 Salaries and wages expense 14900 Dividends 47000 Bal. 296100 123800 296100 Dividends Bal. Retained Earnings 4800 Bal. 102400 Income Summary 107200 48500 58700 107200 53500 Bal Service Revenue Accounts Receivable 17400 Cash 62200 Bal. 79600 Cash Dividends 4800 Bal. 4800 26100 79600 4800 4800 Prepaid Insurance 16000 Insurance Expense Bal Bal. 9000 7000 16000 Service Revenue Cash Accounts Receivable 230100 Deferred Revenue 230100 154100 62200 13800 230100 16000 Bal. Accounts Payable Supplies 13200 Supplies Expense Bal. 13200 8300 4900 13200 Property Tax Expense 10500 Income Summary Cash 10500 10500 10500

Bal Land 168000 Bal. 168000 Cash 168000 168000 Salaries and wages expense 143600 Income Summary 143600 143600 143600 Cash Accounts Payable 13400 Bal. Supplies 8500 21900 8700 13200 Insurance Expense 9000 Income Summary Prepaid Insurance 9000 Bal 21900 9000 9000 Supplies Expense Supplies Deferred Revenue 13800 Bal. 8900 Cash 22700 Service Revenue Bal 8300 7800 14900 22700 8300 Income Summary 8300 8300