Question

Exercise 1-3A Identify account classifications and business activities (LO1-2) Wildcat Corporation has the following transactions with Falcon Incorporated. points Required: 1., 2., & 3. For each transaction, indicate whether Wildcat would report the related account in the balance sheet or income statement For accounts in the balance sheet, indicate whether it would be classified as an asset, liability, or stockholders' equity. For accounts in the income statement, indicate whether it would be classified as a revenue or an expense. Indicate whether each transaction is classified as operating, investing, or financing activity. Transactions Wildcat issues common stock to Falcon Wildcat lends to Falcon by accepting a note. Wildcat receives services from Falcon Wildcat receives interest from Falcon on lending. 2. ® Answer is complete but not entirely correct. Wildcat's Related Account Financial Statement Common stock Balance sheet Notes receivable Balance sheet Service fee expense Balance sheet Interest revenue Balance sheet Account Revenue Liability * Expense X Revenue Activity ® Operating Financing Operating Operating % X →

Answer 1

Classification

	Transaction	Wildcat's related account	Financial statement	Account	Activity
1.	Wildcat issues common stock to Falcon	Common stock	Balance sheet	Stockholder's Equity	Financing
2	Wildcat lends to Falcon by accepting a note	Notes receivable	balance sheet	Asset	Investing
3	Wildcat receives services from Falcon	Service fee expense	Income statmeent	Expense	Operating
4	Wildcat receives interest from Falcon on lending	Interest revenue	Income statement	revenue	operating