Assets Cash Accounts Receivable. Land Total $ 50,000 52,000 33,000 $135,000 Liabilities and Equity Accounts Payable Common Stock Retained Earnings Total $ 25,000 99,000 11,000 $135,000 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 $1,800 cash dividend to the stockholders. Apr. 1 Purchased additional land that cost $33,000 cash. May 1 Made a cash payment on accounts payable of $13,000. July 1 Received $7,400 cash in advance as a retainer for services to be performed monthly over the coming year. Sept. 1 Sold land for $21,000 cash that had originally cost $21,000. Oct. 1 Purchased $1,180 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 $63,000. 31 Incurred other operating expenses on account during the year that amounted to $13,000. 31 Recognized accrued salaries expense of $5,600. 31 Had $120 of supplies on hand at the end of the period. 31 The land purchased on April 1 had a market value of $32,000. 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?
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
a.land
b. Net cash flow from operating activities
c. Rent expense
d. Total liabilities
e, Suplies expense
f, Unearned revenue
g. Net cash flow from investing activities
h.Total expenses
i. Service revenue
j. Cash flow from financing activities
k.Net income
l.
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