The following accounting events apply to Waddell Company’s Year 2 fiscal year: Jan. 1 Acquired $40,000 cash from the issue of common stock. Feb. 1 Paid $5,100 cash in advance for a one-year lease for office space. Mar. 1 Paid a $1,900 cash dividend to the stockholders. April 1 Purchased additional land that cost $34,000 cash. May 1 Made a cash payment on accounts payable of $17,000. July 1 Received $7,600 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 $1,150 of supplies on account. Dec. 31 Earned $57,000 of service revenue on account during the year. 31 Received cash collections from accounts receivable amounting to $54,000. 31 Incurred other operating expenses on account during the year that amounted to $12,000. 31 Recognized accrued salaries expense of $4,200. 31 Had $150 of supplies on hand at the end of the period. 31 The land purchased on April 1 had a market value of $38,000. 31 Recognized $122 of accrued interest revenue. Required Show the effects of the events on the financial statements using the following horizontal statements model. All questions pertain to the Year 2 financial statements. What two additional adjusting entries need to be made at the end of the year? 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?

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter2: Asset And Liability Valuation And Income Recognition

Section: Chapter Questions

Problem 20PC: Analyzing Transactions. Using the analytical framework, indicate the effect of the following related...

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Question

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

Jan.	1	Acquired $40,000 cash from the issue of common stock.
Feb.	1	Paid $5,100 cash in advance for a one-year lease for office space.
Mar.	1	Paid a $1,900 cash dividend to the stockholders.
April	1	Purchased additional land that cost $34,000 cash.
May	1	Made a cash payment on accounts payable of $17,000.
July	1	Received $7,600 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 $1,150 of supplies on account.
Dec.	31	Earned $57,000 of service revenue on account during the year.
	31	Received cash collections from accounts receivable amounting to $54,000.
	31	Incurred other operating expenses on account during the year that amounted to $12,000.
	31	Recognized accrued salaries expense of $4,200.
	31	Had $150 of supplies on hand at the end of the period.
	31	The land purchased on April 1 had a market value of $38,000.
	31	Recognized $122 of accrued interest revenue.

Required

Show the effects of the events on the financial statements using the following horizontal statements model. All questions pertain to the Year 2 financial statements.

What two additional adjusting entries need to be made at the end of the year?
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?
What amount of rent expense would be reported on the income statement?
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?
What amount of net cash flow from investing activities would be reported on the statement of cash flows?
What amount of total expenses would be reported on the income statement?
What total amount of service revenue would be reported on the income statement?
What amount of cash flows from financing activities would be reported on the statement of cash flows?
What amount of net income would be reported on the income statement?
What amount of retained earnings would be reported on the balance sheet?

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