50.1K

Verified Solution

Link Copied!

Waddell Company had the following balances in its accounting records as of December 31, 2015:

Assets				Liabilities and Equity
Cash	$	35,000		Accounts Payable	$	7,500
Accounts Receivable		9,000		Common Stock		40,000
Land		51,000		Retained Earnings		47,500
Total	$	95,000		Total	$	95,000

The following accounting events apply to Waddell Companys 2016 fiscal year:

Jan.	1		Acquired $20,000 cash from the issue of common stock.
Feb.	1		Paid $6,000 cash in advance for a one-year lease for office space.
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.
July	1		Received $9,600 cash in advance as a retainer for services to be performed monthly over the coming year.
Sept.	1		Sold land for $30,000 cash that had originally cost $30,000.
Oct.	1		Purchased $2,500 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 $46,000.
	31		Incurred other operating expenses on account during the year that amounted to $28,000.
	31		Recognized accrued salaries expense of $6,500.
	31		Had $50 of supplies on hand at the end of the period.
	31		The land purchased on April 1 had a market value of $20,000.
	31		Recognized $500 of accrued interest revenue.

Required

Based on the preceding information, answer the following questions for Waddell Company. All questions pertain to the 2016 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 Date Assets = Liabilities + Stockholders Equity Cash Accounts Receivable Prepaid Rent Supplies Interest Receivable Land = Accounts Payable Salaries Payable Unearned Revenue + Common Stock + Retained Earnings 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 = + + Dec. 31 = + + Bal. = + +

a.	What two additional adjusting entries need to be made at the end of the year? (Select all that apply.)
	Feb. 1, prepaid rent June 1, cash dividends to stockholders Aug. 1, cash payment; accounts payable July 1, unearned revenue; cash was received in advance Oct. 1, purchases on account Dec. 31, accrued salaries expense

b.	What amount would Waddell report for land on the balance sheet?

Land=

c.	What amount of net cash flow from operating activities would be reported on the statement of cash flows? (Enter cash outflows as negative amounts.)
	Net cash flow from operating activities

d.	What amount of rent expense would be reported on the income statement? (Do not round intermediate calculations.)

rent expense=

e.	What amount of total liabilities would be reported on the balance sheet?

Total liabilities=

f.	What amount of supplies expense would be reported on the income statement?

supplies expenses=

g.	What amount of unearned revenue would be reported on the balance sheet? (Do not round intermediate calculations.)

unearned revenue=

h.	What amount of net cash flow from investing activities would be reported on the statement of cash flows? (Enter cash outflows as negative amounts.)

net cash flows form financing activities=

i.	What amount of total expenses would be reported on the income statement? (Do not round intermediate calculations.)

total expenses=

j.	What total amount of service revenue would be reported on the income statement? (Do not round intermediate calculations.)

services revenue=

k.	What amount of cash flows from financing activities would be reported on the statement of cash flows? (Enter cash outflows as negative amounts.)

cash flows from financing activities=

l.	What amount of net income would be reported on the income statement? (Do not round intermediate calculations.)

net income=

m.	What amount of retained earnings would be reported on the balance sheet? (Do not round intermediate calculations.)

retained earnings=

Answer & Explanation Solved by verified expert

See Answer