In: Accounting
Assets Liabilities and Equity Cash $ 51,000 Accounts Payable $ 23,000 Accounts Receivable 43,000 Common Stock 84,000 Land 27,000 Retained Earnings 14,000 Total $ 121,000 Total $ 121,000 The following accounting events apply to Waddell Company's Year 2 fiscal year: Jan. 1 Acquired $46,000 cash from the issue of common stock. Feb. 1 Paid $5,100 cash in advance for a one-year lease for office space. Mar. 1 Paid a $1,900 cash dividend to the stockholders. Apr. 1 Purchased additional land that cost $27,000 cash. May 1 Made a cash payment on accounts payable of $10,000. July 1 Received $8,400 cash in advance as a retainer for services to be performed monthly over the coming year. Sept. 1 Sold land for $24,000 cash that had originally cost $24,000. Oct. 1 Purchased $1,070 of supplies on account. Dec. 31 Earned $63,000 of service revenue on account during the year. 31 Received cash collections from accounts receivable amounting to $61,000. 31 Incurred other operating expenses on account during the year that amounted to $13,000. 31 Recognized accrued salaries expense of $5,200. 31 Had $170 of supplies on hand at the end of the period. 31 The land purchased on April 1 had a market value of $40,000. Required Based on the preceding information, answer the following questions for Waddell Company. All questions pertain to the Year 2 financial statements. (Hint: Enter items in general ledger accounts under the accounting equation before answering the questions.)
a. What amount would Waddell report for land on the balance sheet? b. What amount of net cash flow from operating activities would be reported on the statement of cash flows? c. What amount of rent expense would be reported on the income statement? d. What amount of total liabilities would be reported on the balance sheet? e. What amount of supplies expense would be reported on the income statement? f. What amount of unearned revenue would be reported on the balance sheet? g. What amount of net cash flow from investing activities would be reported on the statement of cash flows? h. What amount of total expenses would be reported on the income statement? i. What amount of service revenue would be reported on the income statement? j. What amount of cash flows from financing activities would be reported on the statement of cash flows? k. What amount of net income would be reported on the income statement? l. What amount of retained earnings would be reported on the balance sheet?
a. | Land | $30,000 |
b. | Net cash flow from operating activities | |
c. | rent expense | 4,675 |
d | total liabilities | 36,470 |
e | supplies expense | 900 |
f | unearned revenue | 4,200 |
g | net cash flow from investing activities | (3,000) |
h | total expense | |
i | service revenue | |
j | cash flows from financing activities | |
k | net income | |
l | retained earnings |
b. | Net cash flow from operating activities: | |||||
$ | ||||||
Cash paid for lease | -5100 | |||||
Cash payment on accounts payable | -10000 | |||||
Cash received in advance as a retainer | 8400 | |||||
Cash collections from accounts receivable | 61000 | |||||
Total | 54300 | |||||
h. | Total expense: | |||||
$ | ||||||
Rent expense | 4675 | |||||
Supplies expense | 900 | |||||
Other operating expenses | 13000 | |||||
Salaries expense | 5200 | |||||
Total | 23775 | |||||
i. | Service revenue: | |||||
$ | ||||||
Earned on account during the year | 63000 | |||||
Earned from advance | (8400-4200) | 4200 | ||||
Total | 67200 | |||||
j. | Cash flows from financing activities: | |||||
$ | ||||||
Issue of common stock | 46000 | |||||
Dividend paid | -1900 | |||||
Total | 44100 | |||||
k. | Net income: | |||||
$ | ||||||
Revenues: | ||||||
Service revenue | 67200 | |||||
Less: Total expenses | 23775 | |||||
Net income | 43425 | |||||
l. | Retained earnings: | |||||
$ | ||||||
Beginning balance | 14000 | |||||
Add:Net income | 43425 | |||||
57425 | ||||||
Less: Dividend | 1900 | |||||
Ending balance | 55525 | |||||