Exercise 2-22A (Algo) Closing the accounts LO 2-4 The following information was drawn from the accounting records of Wyckoff Company as of December 31, Year 2, before the temporary accounts had been closed. The Cash balance was $5,930, and Notes Payable amounted to $4,800. The company had revenues of $3,960 and expenses of $2,680. The company's Land account had a $4,500 balance. Dividends amounted to $350. The balance of the Common Stock account was $1,200. Required a. Identify which accounts would be classified as permanent and which accounts would be classified as temporary. b. Assuming that Wyckoff's beginning balance (as of January 1, Year 2) in the Retained Earnings account was $3,500, determine its balance after the temporary accounts were closed at the end of Year 2. c. What amount of net income would Wyckoff Company report on its Year 2 income statement? Complete this question by entering your answers in the tabs below. Req A Req B and C Identify which accounts would be classified as permanent and which accounts would be classified as temporary. Cash Account Notes Payable Classification Revenues Expenses Land Dividends Common Stock Retained Earnings < Req A Req B and C > Complete this question by entering your answers in the tabs below. Req A Req B and C Assuming that Wyckoff's beginning balance (as of January 1, Year 2) in the Retained Earnings account was $3,500, determine its balance after the temporary accounts were closed at the end of Year 2. What amount of net income would Wyckoff Company report on its Year 2 income statement? b. Ending retained earnings C.Net income < Req A Req B and C > Exercise 2-15A (Algo) Supplies, unearned revenue, and the financial statements model LO 2-5, 2-7 Hart, Attorney at Law, experienced the following transactions in Year 1, the first year of operations: 1. Accepted $17,700 on April 1, Year 1, as a retainer for services to be performed evenly over the next 12 months. 2. Performed legal services for cash of $62,000. 3. Purchased $1,450 of office supplies on account. 4. Paid $1,305 of the amount due on accounts payable. 5. Paid a cash dividend to the stockholders of $5,000. 6. Paid cash for operating expenses of $20,900. 7. Determined that at the end of the accounting period $120 of office supplies remained on hand. 8. On December 31, Year 1, recognized the revenue that had been earned for services performed in accordance with Transaction 1. Required Show the effects of the events on the financial statements using the following horizontal statements model. In the Cash Flows column, use OA to designate operating activity, FA for financing activity, IA for investing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. The first event has been recorded as an example. (Do not round intermediate calculations. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells will require entry.) HART, ATTORNEY AT LAW Effect of Transactions on the Financial Statements for Year 1 Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Statement of Cash Flow Accounts Event No. Cash + Supplies Payable Unearned Revenue Retained Revenue Expense |= Net Income Earnings 1. 17,700 + + 17,700 II 17,700 OA 2. 3. + 4. + 5. + 6. + + 7. + + 8. + + Totals 17,700 + 0 0+ 17,700 0 17,700