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Waddell Company had the following balances in its accounting records as of December 31, 2018
Assets Liabilities and Equity
Cash $55,000 Accounts Payable $23,000
Accounts Receivable 44,000 Common Stock 91,000
Land 32,000 Retained Earnings 17,000
Totals $131,000 $131,000
The following accounting events apply to Waddell Company’s 2019 fiscal year:
Jan. 1 Acquired $48,000 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 $2,400 cash dividend to the stockholders.
April 1 Purchased additional land that cost $32,000 cash.
May 1 Made a cash payment on accounts payable of $20,000.
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 $22,000 cash that had originally cost $22,000.
Oct. 1 Purchased $970 of supplies on account.
Dec. 31 Earned $68,000 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 $13,000.
31 Recognized accrued salaries expense of $5,100.
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 $32,000.
31 Recognized $116 of accrued interest revenue.
Required:
Based on the preceding information, answer the following questions for Waddell Company. All questions pertain to the Year 2 financial statements.
1. What two additional adjusting entries need to be made at the end of the year?
2. What amount would Waddell report for land on the balance sheet?
3. What amount of net cash flow from operating activities would be reported on the statement of cash flows?
4. What amount of rent expense would be reported on the income statement?
5. What amount of total liabilities would be reported on the balance sheet?
6. What amount of supplies expense would be reported on the income statement?
7. What amount of unearned revenue would be reported on the balance sheet?
8. What amount of net cash flow from investing activities would be reported on the statement of cash flows?
9. What amount of total expenses would be reported on the income statement?
10. What total amount of service revenue would be reported on the income statement?
11. What amount of cash flows from financing activities would be reported on the statement of cash flows?
12. What amount of net income would be reported on the income statement?
13. What amount of retained earnings would be reported on the balance sheet?
What two additional adjusting entries need to be made at the end of the year? (Select which of the following statements (is) are true by selecting an "X".)
a. Feb. 1, prepaid rent
b. June 1, cash dividends to stockholders
c. Aug. 1, cash payment; accounts payable
d. July 1, unearned revenue; cash was received in advance
e. Oct. 1, purchases on account
f. Dec. 31, accrued salaries expense
Refer the income statement, cash flow Statement, balance sheet and answer question A to L.
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
h. Total expenses
i. Service revenue
j. Cash flows from financing activities
k. Net income
l. Retained earnings

Sagot :

abiolataiwo2015

1. The  two additional adjusting entries   are:

•Rent Expenses $5,225

•Revenue $3,700

2.  Balance sheet reported  is $42,000

3.  Netnet cash flow from operating activities  is $37,500

4. Rent expenset is $5,225$5,225

5.  Totaltotal liabilities is $23,770

6.  Supplies expense   $800

7.    Unearnedunearned revenue  is $3,700

8.    Netnet cash flow  is ($10,000)

9.   Totaltotal expenses is $24,125

10.   Total  service revenue is $71,700

 11.   Cash cash  Cash flows from financing activities  is $45,600

12.   Netnet income  is $26,216

13.   Retainedretained earnings  is $43,216

1. Additional adjusting entries that must be made are:

•Part of the Prepaid rent of the amount of $5,225 will be  allocated to the rent expense

Rent Expenses $5,225

($5,700 x 11/12 = $5,225)

•Part  of the revenue received in advance of the amount of  wi$3,700ll  be recognized as revenue

Revenue

($7,400 x 6/12 = $3,700)



2. Beginning balance $32,000

Add Cost of Land purchased $32,000

Less Cost of Land sold ($22,000)

Ending balance $42,000

3.Cash received from customers

Received cash in advance as a retainer for services to be performed monthly over the coming year $7,400

Received cash collections from accounts receivable $54,000

Cash Paid to Suppliers:

Paid cash in advance for a one-year lease for office space $(5,700)

Made a cash payment on accounts payable $(20,000)

Cash flow from operating activities $35,700

4.Rent for 12 months $5,700

Less Rent per months $475

($5,700/12)

Rent expense $5,225

5. Accounts Payable:

Beginning balance $23,000

Cash payment on accounts payable $(20,000)

Purchased supplies on account $970

Incurred other operating expenses on account $13,000

Balance of Accounts Payable $16,970

Unearned Income $3,700

Accrued salaries expense $5,100

Total Liabilities $23,770

($16,970+$3,700+$5,100)

6.Supplies purchased $970

Less Supplies on hand ($170)

Supplies expense $800

7.Revenue received ion July 1 for 12 months contract $7,400

50% earned in the year $(3,700)

Unearned revenue of the balance sheet $3,700

8. Cash used to purchase land $(32,000)

Proceeds from the sale of land $22,000

Cash used by investing activities $(10,000)

9. Lease for office space $5,225

Supplies $800

Other operating expenses $13,000

Salaries expense $5,100

Total expenses $24,125

10. Revenue earned from retainer received in advance $3,700

Service revenue on account $68,000

Total Service Revenue $71,700

11. Issue of common stock $48,000

Cash dividend to the stockholders $(2,400)

Cash provided by financing activities $45,600

12.Total Service Revenue $71,700

($3,700+$68,000)

Interest Revenue $116

Total expenses $(45,600)

Net income $26,216

13. Retained Earnings on the balance sheet is:

Beginning balance $17,000

Net income for the year $26,216

Ending balance $43,216



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