Waddell Company had the following balances in its accounting records as of December 31, Year 1: Assets Cash Accounts receivable Liabilities and Stk. Equity Accounts payable Common stock Retained earnings Total $35,000 9,000 51,000 $95,000 Land $ 7,500 40,000 47,500 $95,000 Total The following accounting events apply to Waddell Company's Year 2 fiscal year: Jan. 1 Acquired $20,000 cash from the issue of common stock. Mar. 1 Paid a $2,000 cash dividend to the stockholders. April 1 Purchased additional land that cost $15,000 cash. May 1 Made a cash payment on accounts payable of $5,500. Sept. 1 Sold land for $30,000 cash that had originally cost $30,000. Dec. 31 Earned $58,000 of service revenue on account during the year. 31 Received cash collections from accounts receivable amounting to $46,000. 31 Incurred other operating expenses on account during the year that amounted to $28,000. 31 The land purchased on April 1 had a market value of $20,000. Required Show the effects of the events on the financial statements using the following horizontal statements model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. 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 total liabilities would be reported on the balance sheet? d. What amount of net cash flow from investing activities would be reported on the statement of cash flows? e. What amount of total expenses would be reported on the income statement? f. What amount of service revenue would be reported on the income statement? g. What amount of cash flows from financing activities would be reported on the statement of cash flows? h. What amount of net income would be reported on the income statement? i. What amount of retained earnings would be reported on the balance sheet? Accounting Equation Reg A to I Show the effects of the events on the financial statements using the following horizontal statements model. In the Cash Flow column, use OA to designate operating activity, activity, and NC for net change in cash. (Enter any decreases to account balances with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an in corresponding input needed.) WADDELL COMPANY Horizontal Financial Statements Model for Year 2 Balance Sheet Income Statement Statement of Cash Flows Revenue Expenses Net Income Date Assets Accounts Receivable Liabilities Accounts Payable Stockholders' Equity Common Retained Stock Earnings Cash Land + + Beg. 1/1 3/1 + + + + - + + + + - + 4/1 5/1 + + + + 9/1 + + + + + + + + 12/31 12/31 12/31 12/31 Totals + + + + + + 0+ 0 + 0 = 0 + 0 + 0 0 1 0 = 0 0 Accounting Equation Reg A to I 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 total liabilities would be reported on the balance sheet? d. What amount of net cash flow from investing activities would be reported on the statement of cash flows? e. What amount of total expenses would be reported on the income statement? f. What amount of service revenue would be reported on the income statement? g. What amount of cash flows from financing activities would be reported on the statement of cash flows? h. What amount of net income would be reported on the income statement? i. What amount of retained earnings would be reported on the balance sheet? Show less a. b. C. d. e. Land Net cash flow from operating activities Total liabilities Net cash flow from investing activities Total expenses Total revenue Cash flows from financing activities Net income Retained earnings f. g h
