Problem 2-40A (Algo) Effect of events on financial statements LO 2-3, 2-8

Waddell Company had the following balances in its accounting records as of December 31, Year 1.

Assets	Liabilities and Equity
Cash	$ 48,000	Accounts Payable	$ 28,000
Accounts Receivable	47,000	Common Stock	80,000
Land	32,000	Retained Earnings	19,000
Total	$ 127,000	Total	$ 127,000

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

January 1	Acquired $52,000 cash from the issue of common stock.
February 1	Paid $5,100 cash in advance for a one-year lease for office space.
March 1	Paid a $2,300 cash dividend to the stockholders.
April 1	Purchased additional land that cost $32,000 cash.
May 1	Made a cash payment on accounts payable of $14,000.
July 1	Received $7,200 cash in advance as a retainer for services to be performed monthly over the coming year.
September 1	Sold land for $21,000 cash that had originally cost $21,000.
October 1	Purchased $1,150 of supplies on account.
December 31	Earned $65,000 of service revenue on account during the year.
December 31	Received cash collections from accounts receivable amounting to $57,000.
December 31	Incurred other operating expenses on account during the year that amounted to $13,000.
December 31	Recognized accrued salaries expense of $5,300.
December 31	Had $130 of supplies on hand at the end of the period.
December 31	The land purchased on April 1 had a market value of $36,000.

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?

	Amount
a.	Land
b.	Net cash flow from operating activities
c.	Rent expense
d.	Total liabilities
e.	Supplies expense
f.	Unearned revenue
g.	Net cash flow from investing activities
h.	Total expenses
i.	Service revenue
j.	Cash flows from financing activities
k.	Net income
l.	Retained earnings