Reference no: EM13548012

Tarkington Freight Service provides delivery of merchandise to retail grocery stores in the Northeast. At the beginning of 2009, the following account balances were available:

Cash ......................................................... $ 92,100
Accounts Receivable ...................................... 361,500
Supplies ..................................................... 24,600
Prepaid Advertising ....................................... 2,000
Building, Warehouse ....................................... 2,190,000
Accumulated Depreciation, Warehouse ................. 280,000
Equipment ................................................... 795,000
Accumulated Depreciation, Equipment .................. 580,000
Land ........................................................... 304,975
Accounts Payable ............................................ 17,600
Wages Payable ............................................... 30,200
Notes Payable (due in 2013) ............................... 1,000,000
Common Stock ............................................... 1,400,000
Retained Earnings, 12/31/2008 ............................. 462,375
During 2009 the following transactions occurred:

a. Tarkington delivered merchandise to customers, all on credit, for $2,256,700.

Tarkington also made cash deliveries of merchandise for $686,838.

b. There remains $286,172 of accounts receivable to be collected at December 31, 2009.

c. Tarkington purchased advertising of $138,100 during 2009 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 2009 were paid early in 2009. There remains $5,600 of accounts payable unpaid at year-end.

f. Wages payable at the beginning of 2009 were paid early in 2009.Wages were earned and paid during 2009 in the amount of $666,142.

g. During the year, Trish Hurd, a principle stockholder, purchased an automobile costing $42,000 for her personal use.

h. One-half year's interest at 6 percent was paid on the note payable on July 1, 2009.

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 2009.
The income tax rate is 30 percent.

Required:

1. Post the 2009 beginning balances to T-accounts. Prepare journal entries for transactions a through k 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 statement of changes in retained earnings.

5. Prepare a classified balance sheet

6. Prepare closing entries.

7. Did you include transaction g among Tarkington's 2009 journal entries? Why or why not?