Assets Liabilities and Equity Cash $ 51,000 Accounts Payable $ 23,000 Accounts Receivable 43,000 Common Stock...

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

Solutions

Expert Solution

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

ekkarill92 answered 2 years ago

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