Problem 2-40A 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	$	30,000
Accounts Receivable		47,000		Common Stock		85,000
Land		31,000		Retained Earnings		11,000
Total	$	126,000		Total	$	126,000

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

Jan.		1		Acquired $52,000 cash from the issue of common stock.
Feb.		1		Paid $5,700 cash in advance for a one-year lease for office space.
Mar.		1		Paid a $2,000 cash dividend to the stockholders.
Apr.		1		Purchased additional land that cost $31,000 cash.
May		1		Made a cash payment on accounts payable of $20,000.
July		1		Received $8,600 cash in advance as a retainer for services to be performed monthly over the coming year.
Sept.		1		Sold land for $22,000 cash that had originally cost $22,000.
Oct.		1		Purchased $1,040 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 $65,000.
		31		Incurred other operating expenses on account during the year that amounted to $10,000.
		31		Recognized accrued salaries expense of $4,500.
		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 $34,000.

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?

Accounting Equation Reg A to L 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.) (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.) Accounting Equation Assets Date Accounts Liabilities Salaries Payable Cash Stockholders' Equity Common Retained Stock Earnings Receivable Prepaid Rent Accounts Payable Supplies 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 Bal. Complete this question by entering your answers in the tabs below. Accounting Equation Reg A to L What amount would Waddell report for land on the balance sheet? What amount of net cash flow from operating activities would be reported on the statement of cash flows? (Enter cash outflows as negative amounts.) What amount of rent expense would be reported on the income statement? (Do not round intermediate calculations.) What amount of total liabilities would be reported on the balance sheet? What amount of supplies expense would be reported on the income statement? What amount of unearned revenue would be reported on the balance sheet? (Do not round intermediate calculations.) What amount of net cash flow from investing activities would be reported on the statement of cash flows? (Enter cash outflows as negative amounts.) What amount of total expenses would be reported on the income statement? (Do not round intermediate calculations.) What amount of service revenue would be reported on the income statement? (Do not round intermediate calculations.) What amount of cash flows from financing activities would be reported on the statement of cash flows? (Enter cash outflows as negative amounts.) What amount of net income would be reported on the income statement? (Do not round intermediate calculations.) What amount of retained earnings would be reported on the balance sheet? (Do not round intermediate calculations.) Show less 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 n. Total expenses i. Service revenue j cash flows from financing activities K. Net income 1. Retained earnings