Question: Tarkington Freight Service provides delivery of merchandise to retail grocery

Tarkington Freight Service provides delivery of merchandise to retail grocery stores in the Northeast. At the beginning of 2011, the following account balances were available:
During 2011 the following transactions occurred:
a. Tarkington performed deliveries for customers, all on credit, for $2,256,700. Tarkington also made cash deliveries for $686,838.
b. There remains $286,172 of accounts receivable to be collected at December 31, 2011.
c. Tarkington purchased advertising of $138,100 during 2011 and debited the amount to prepaid advertising.
d. Supplies of $27,200 were purchased on credit and debited to the supplies account.
e. Accounts payable at the beginning of 2011 were paid early in 2011. There remains $5,600 of accounts payable unpaid at year-end.
f. Wages payable at the beginning of 2011 were paid early in 2011. Wages were earned and paid during 2011 in the amount of $666,142.
g. During the year, Trish Hurd, a principal stockholder, purchased an automobile costing $42,000 for her personal use.
h. One-half year’s interest at 6 percent annual rate was paid on the note payable on July 1, 2011.
i. Property taxes were paid on the land and buildings in the amount of $170,000.
j. Dividends were declared and paid in the amount of $25,000.
The following data are available for adjusting entries:
• Supplies in the amount of $13,685 remained unused at year-end.
• Annual depreciation on the warehouse building is $70,000.
• Annual depreciation on the warehouse equipment is $145,000.
• Wages of $60,558 were unrecorded and unpaid at year-end.
• Interest for six months at 6 percent per year on the note is unpaid and unrecorded at year-end.
• Advertising of $14,874 remained unused at the end of 2011.
• Income taxes of $482,549 related to 2011 are unpaid at year end.
Required:
1. Post the 2011 beginning balances to T-accounts. Prepare journal entries for transactions (a) through (j) and post the journal entries to T-accounts adding any new T-accounts you need.
2. Prepare the adjustments and post the adjustments to the T-accounts adding any new T- accounts you need.
3. Prepare an income statement.
4. Prepare a retained earnings statement.
5. Prepare a classified balance sheet
6. Prepare closing entries.
7. Did you include transaction (g) among Tarkington’s 2011 journal entries? Why or why not?

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  • CreatedSeptember 22, 2015
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