The following accounting events apply to Waddell Company's Year 2 fiscal year: Jan. 1 Acquired $40,000 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 $1,800 cash dividend to the stockholders. Apr. 1 Purchased additional land that cost $33,000 cash. May 1 Made a cash payment on accounts payable of $13,000. July 1 Received $7,400 cash in advance as a retainer for services to be performed monthly over the coming year. Sept. 1 Sold land for $21,000 cash that had originally cost $21,000. Oct. 1 Purchased $1,180 of supplies on account. Dec. 31 Earned $58,000 of service revenue on account during the year. 31 Received cash collections from accounts receivable amounting to $63,000. 31 Incurred other operating expenses on account during the year that amounted to $13,000. 31 Recognized accrued salaries expense of $5,600. 31 Had $120 of supplies on hand at the end of the period. 31 The land purchased on April 1 had a market value of $32,000. 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?

The following accounting events apply to Waddell Company's Year 2 fiscal year: Jan. 1 Acquired $40,000 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 $1,800 cash dividend to the stockholders. Apr. 1 Purchased additional land that cost $33,000 cash. May 1 Made a cash payment on accounts payable of $13,000. July 1 Received $7,400 cash in advance as a retainer for services to be performed monthly over the coming year. Sept. 1 Sold land for $21,000 cash that had originally cost $21,000. Oct. 1 Purchased $1,180 of supplies on account. Dec. 31 Earned $58,000 of service revenue on account during the year. 31 Received cash collections from accounts receivable amounting to $63,000. 31 Incurred other operating expenses on account during the year that amounted to $13,000. 31 Recognized accrued salaries expense of $5,600. 31 Had $120 of supplies on hand at the end of the period. 31 The land purchased on April 1 had a market value of $32,000. 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?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The following accounting events apply to Waddell Company's Year 2 fiscal year:

Jan.	1	Acquired $40,000 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 $1,800 cash dividend to the stockholders.
Apr.	1	Purchased additional land that cost $33,000 cash.
May	1	Made a cash payment on accounts payable of $13,000.
July	1	Received $7,400 cash in advance as a retainer for services to be performed monthly over the coming year.
Sept.	1	Sold land for $21,000 cash that had originally cost $21,000.
Oct.	1	Purchased $1,180 of supplies on account.
Dec.	31	Earned $58,000 of service revenue on account during the year.
	31	Received cash collections from accounts receivable amounting to $63,000.
	31	Incurred other operating expenses on account during the year that amounted to $13,000.
	31	Recognized accrued salaries expense of $5,600.
	31	Had $120 of supplies on hand at the end of the period.
	31	The land purchased on April 1 had a market value of $32,000.

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.
b.
C.
d.
e.
f.
g.
h.
i.
|j.
k.
I.
Land
Net cash flow from operating activities
Rent expense
Total liabilities
Supplies expense
Unearned revenue
Net cash flow from investing activities
Total expenses
Service revenue
Cash flows from financing activities
Net income
Retained earnings
$
32,000 X
$(31,400)
$
5,100 X
$
25,000 X
$
1,060
$
7,400 x
$
(33,000) X
$
14,485 X
$
58,000 X
$ (40,000) X
$
39,000 X
$
49,100 X

Waddell Company had the following balances in its accounting records as of December 31, Year 1:
Assets
Cash
Accounts Receivable
Land
Total
$ 50,000
52,000
33,000
$135,000
Liabilities and Equity
Accounts Payable
Common Stock
Retained Earnings
Total
$ 25,000
99,000
11,000
$135,000

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