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Required Each of the following independent events requires a year-end adjusting entry. Show how each event and its related adjusting entry affect the accounting equation. Assume a December 31 closing date. The first event is recorded as an example. (Do not round intermediate calculations & Round your final answer to nearest whole dollar.) a. Pald $6.400 cash in advance on October 1 for a one year insurance policy. b. Received an $5.200 cash advance for a contract to provide services in the future. The contract required a one-year commitment. starting April 1 c. Purchased $2,000 of supplies on account. At year's end, $255 of supplies remained on hand. d. Paid $11,520 cash in advance on August 1 for a one year lease on office space. + Event Adjustment The Accounting Equation Total Assets Other Liabilities Cash Assets (6 400) 6.100 (1,600) Stockholders Equity Common Retained Stock Earnings + + a + a Adi (1 600) b + + b Adj C + + c. Adi d 11111111 + d. Adi The following selected accounts and account balances were taken from the records of Nowell Company. Except as otherwise indicated, all balances are as of December 31, 2018, before the closing entries were recorded. Consulting revenue Cash Cash received from common stock issued during 2017 Travel expense Dividends Cash flow from investing activities Rent expense Payment to reduce debt principal Retained earnings, January 1, 2018 Salary expense Cash flow from operating activities Common stock, December 31, 2018 Other operating expenses $10,400 8,200 3,200 709 1,500 2,800 1,550 22,700 14,100 3,000 2,600 10,400 2,100 a. Prepare the income statement Nowell would include in its 2018 annual report NOWELL COMPANY Income Statement For the Year Ended December 31, 2018 Expenses Total expenses b. Identify the accounts that should be closed to the Retained Earnings account. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Consulting revenue 2 Supplies expense Travel expense ? Salaries payable ? Dividends ? Cash ? Rent expense ? Salary expense 2 other operating expense c-1. Determine the Retained Earnings account balance at December 31, 2018 Bindings c-2. Which of the following statement(s) is true? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) ? Net income does not include revenue of the current year 2 Retained earnings does not include current year net income, but only the balance from previous years 2 Retained earnings not only includes current year net income, but also the balance from previous years and reductions for dividends ? Retained earnings does not include the balance from previous years, but only the reductions for dividends. 2 Net income only includes revenues and expenses for the current year Waddell Company had the following balances in its accounting records as of December 31, 2018: Assets Cash Accounts Receivable Land Totals $ 48,000 52,000 28,000 $128,000 Liabilities and Equity Accounts Payable Common Stock Retained Earnings $ 25,000 88,000 15,000 $128,000 The following accounting events apply to Waddell Company's 2019 fiscal year: Jan. Feb. Mar. April May July 1 1 1 1 1 1 Sept. Oct. Dec. 1 1 31 31 31 Acquired $40,000 cash from the issue of common stock. Paid $5,700 cash in advance for a one-year lease for office space. Paid a $2,500 cash dividend to the stockholders. Purchased additional land that cost $28,000 cash. Made a cash payment on accounts payable of $15,000. Received $8,200 cash in advance as a retainer for services to be performed monthly over the coming year. Sold land for $23,000 cash that had originally cost $23,000. Purchased $950 of supplies on account. Earned $56,000 of service revenue on account during the year. Received cash collections from accounts receivable amounting to $60,000. Incurred other operating expenses on account during the year that amounted to $12,000. Recognized accrued salaries expense of $5,300. Had $130 of supplies on hand at the end of the period. The land purchased on April 1 had a market value of $40,000. Recognized $123 of accrued interest revenue. 31 31 31 31 Required Based on the preceding information, answer the following questions for Waddell Company. All questions pertain to the 2018 financial statements. (Hint: Enter Items in general ledger accounts under the accounting equation before answering the questions.) a. What two additional adjusting entries need to be made at the end of the year? b. What amount would Waddell report for land on the balance sheet? c. What amount of net cash flow from operating activities would be reported on the statement of cash flows? (Enter cash outflows as negative amounts.) d. What amount of rent expense would be reported on the income statement? (Do not round intermediate calculations.) e. What amount of total liabilities would be reported on the balance sheet? f. What amount of supplies expense would be reported on the income statement? g. What amount of unearned revenue would be reported on the balance sheet? (Do not round intermediate calculations.) h. What amount of net cash flow from investing activities would be reported on the statement of cash flows? (Enter cash outflows as negative amounts.) i. What amount of total expenses would be reported on the income statement? (Do not round intermediate calculations.) j. What total amount of service revenue would be reported on the income statement? (Do not round intermediate calculations.) k. What amount of cash flows from financing activities would be reported on the statement of cash flows? (Enter cash outflows as negative amounts.) 1. What amount of net income would be reported on the income statement? (Do not round intermediate calculations.) m. What amount of retained earnings would be reported on the balance sheet? (Do not round intermediate calculations.) WADDELL COMPANY Accounting Equation Assets Dal Accounts Recevable Liabilities Salaries Payable Interest Receivable Prepaid Rent Supplies Stockholder Et Common Retained Stock Accounts Payable Land Unearned Revenue Bal Jan 1 + Feb 1 + + Mar 1 April 1 + + + May 1 July 1 Sept 1 Oct 1 + + + Dec 31 Dec 31 Dec. 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Bal. + Accounting Equation Req A Req B to M What two additional adjusting entries need to be made at the end of the year? (Select which of the following statements (is) are true by selecting an "X".) Feb. 1, prepaid rent June 1, cash dividends to stockholders Aug. 1, cash payment accounts payable July 1, unearned revenue, cash was received in advance Oct 1, purchases on account Dec 31, accrued salaries expense Accounting Equation Req A Req B to M Refer the income statement, cash flow Statement, balance sheet and answer question B to M. e b. Land Net cash flow from operating activities d Rent expense Total liabilities f Supplies expense 9. Unearned revenue h Net cash flow from investing activities 1. Total expenses Service revenue k Cash flows from financing activities Net income m. Retained earnings - The following accounts and balances were drawn from the records of Barker Company at December 31, 2018: Supplies Cash flow from investing act. Prepaid insurance Service revenue Other operating expenses Supplies expense Insurance expense Beginning common stock Cash flow from operating act. Common stock issued 740 Beginning retained earnings (6,200) Cash flow from financing act. 2,300 Rent expense 75,000 Dividends 42,000 Cash 220 Accounts receivable 1,100 Prepaid rent 1,200 Unearned revenue 7,900 Land 5,000 Accounts payable $ 19,000 (5,800) 2,200 5,100 12,300 19,000 4,900 6,200 37,000 20,460 Required Use the accounts and balances from Barker Company to construct an income statement, statement of changes in stockholders' equity, balance sheet and statement of cash flows (show only totals for each activity on the statement of cash flows). Income Statement SE Balance Sheet Stmt of Cash Flows Use the accounts and balances from Barker Company to construct an income statement. BARKER COMPANY Income Statement For the Year Ended December 31, 2018 Revenue Total revenue Expenses Total expenses Income Statement SE Balance Sheet Stmt of Cash Flows Use the accounts and balances from Barker Company to construct statement of changes in stockholders' equity. BARKER COMPANY Statement of Changes in Stockholders' Equity For the Year Ended December 31, 2018 Beginning common stock Ending common stock Beginning retained earnings Ending retained earnings Total stockholders' equity Income Statement SE Balance sheet Stmt of Cash Flows Use the accounts and balances from Barker Company to construct balance sheet. BARKER COMPANY Balance Sheet As of December 31, 2018 Assets Total assets Liabilities Total liabilities Stockholders' Equity Income Statement SE Balance Sheet Stmt of Cash Flows Use the accounts and balances from Barker Company to construct statement of cash flows (show only totals for each activity on the statement of cash flows). (Amounts to be deducted and cash outflows should be indicated with a minus sign.) BARKER COMPANY Statement of Cash Flows For the Year Ended December 31, 2018 Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Net change in cash (4 100) Ending cash balance $ 12.300

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