Comprehensive Problem: Reviewing the Accounting Cycle} Fodor Freight Service provides delivery of merchandise to retail grocery stores

Question:

Comprehensive Problem: Reviewing the Accounting Cycle}

Fodor Freight Service provides delivery of merchandise to retail grocery stores in northern Manitoba. At the beginning of 2018 , the following account balances were available:

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During 2018 the following transactions occurred:

a. Fodor performed deliveries for customers, all on credit, for $\$ 2,256,700$. Fodor also made cash deliveries for $\$ 686,838$.

b. There remains $\$ 286,172$ of accounts receivable to be collected at December 31, 2018 .

c. Fodor purchased advertising of $\$ 138,100$ during 2018 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 2018 were paid early in 2018 . There remains $\$ 5,600$ of accounts payable unpaid at year-end.

f. Wages payable at the beginning of 2018 were paid early in 2018. Wages were earned and paid during 2018 in the amount of $\$ 666,142$.
g. During the year, Trish Hurd, a principal shareholder, purchased an automobile costing $\$ 42,000$ for her personal use.
h. One-half year's interest at $6 \%$ annual rate was paid on the note payable on July 1, 2018 .
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 huilding 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\% per year on the note is unpaid and unrecorded at year-end.
- Advertising of $\$ 14,874$ remained unused at the end of 2018 .
- Income taxes of $\$ 482,549$ related to 2018 are unpaid at year-end.
\section*{Required:}
1. Post the 2018 beginning balances to T-accounts. Prepare journal entries for transactions $a$ through $j$ and post the journal entries to $\mathrm{T}$-accounts, adding any new $\mathrm{T}$-accounts you need.
2. Prepare the adjustments and post the adjustments to the T-accounts, adding any new T-accounts you need.
3. Prepare a statement of earnings.
4. Prepare a statement of retained earnings.
5. Prepare a classified statement of financial position.
6. Prepare closing entries.
7. CONCEPTUAL CONNECTION Did you include transaction $g$ among Fodor's 2018 journal entries? Why or why not?