Problem 3-70A Part II

Comprehensive Problem: Reviewing the Accounting Cycle

Tarkington Freight Service provides delivery of merchandise to retail grocery stores in the Northeast. The company accountant has posted all the transactions to T-accounts as well as generating the journal and adjusting entries.

Required:

The following is a list of accounts and their ending balances. Using the data, prepare Takington's financial statements.

Accounts Payable5,600Interest Expense60,000Accounts Receivable286,172Interest Payable30,000Accum. Depr. (Building)350,000Land304,975Accum. Depr. (Equipment)725,000Notes Payable1,000,000Advertising Expense125,226Prepaid Advertising14,874Building (Warehouse)2,190,000Property Taxes Expense170,000Cash2,012,324Retained Earnings462,375Common Stock1,400,000Service Revenue2,943,538Depreciation Expense215,000Supplies Expense38,115Dividends25,000Supplies13,685Equipment795,000Wages Expense726,700Income Taxes Expense482,549Wages Payable60,558Income Taxes Payable482,549

3.Prepare an income statement.

Note: For grouped values (e.g. revenues or expenses), enter individual amounts as positive values. If the total for the group is subtracted or an overall negative amount, enter using a minus sign.

Tarkington Freight ServiceIncome StatementFor the Year Ended December 31, 2019

$Expenses:

$

$

4.Prepare a retained earnings statement.

Tarkington Freight ServiceRetained Earnings StatementFor the Year Ended December 31, 2019

$

$

5.Prepare a classified balance sheet.

Tarkington Freight ServiceBalance SheetDecember 31, 2019AssetsCurrent assets:

$

Total current assets$Property, plant, and equipment:

$

$

$

Total property, plant, and equipmentTotal assets$LiabilitiesCurrent liabilities:

$

Total current liabilities$Long-term liabilities:

Total liabilities$Stockholders' EquityStockholders' equity:

$

Total stockholders' equityTotal liabilities and stockholders' equity$

6.Prepare closing entries. If an amount box does not require an entry, leave it blank.

Dec. 31

(Close revenue accounts)Dec. 31

(Close expense accounts)Dec. 31

(Close Income Summary)Dec. 31

(Close Dividends)

7.Conceptual Connection: Did you include Transaction g among Tarkington's 2019 journal entries?