Question

Please use the accounting equation for this (Horizontal Financial Statement Model)

Waddell Company had the following balances in its accounting records as of December 31, Year 1: Assets Cash Accounts receivable Land Total $35,000 9,000 51,000 $95,000 Liabilities and Stk. Equity Accounts payable Common stock Retained earnings Total $ 7,500 40,000 47,500 $95,000 The following accounting events apply to Waddell Company's Year 2 fiscal year: Jan. 1 Acquired $20,000 cash from the issue of common stock. 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. Sept. 1 Sold land for $30,000 cash that had originally cost $30,000. 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 The land purchased on April 1 had a market value of $20,000. Required Show the effects of the events on the financial statements using the following horizontal statements model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. 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 total liabilities would be reported on the balance sheet? d. What amount of net cash flow from investing activities would be reported on the statement of cash flows? e. What amount of total expenses would be reported on the income statement? f. What amount of service revenue would be reported on the income statement? g. What amount of cash flows from financing activities would be reported on the statement of cash flows? h. What amount of net income would be reported on the income statement? i. What amount of retained earnings would be reported on the balance sheet?

Answer 1

Summary of Cash Flows Balance Sheet Income Statement Assets Liabilites Date Accounts Accounts Common Retained Cash + Receivables |+|Land | I = Payable + Stock |+ Earnings Beg 350000 90000+ 510000 75000+ 400000+ 47500 01-Jan 2000014 이+ + OLE = 이 It 200000+ 0 01-Mar -20000+ 이+ 이= It 이+ -2000 01-Apr -150000+ 이+ 150000 It 이+ 0 01-May -55000+ 0 + 이= -55000+ 이 0 이 300000+ 이+ - 300000= 이+ 이+ ol 31-Dec | C+ 580001+ 이= 이+ 이+ 0 이 31-Dec 460000 + -460000 + 이= 이 이+ 0 31-Dec - 280000+ 이+ 이= + 이+ 31-Dec + 이+ 이= 이+ 이+ 30000 Totals 805000 210000+ 360000 = 20000+ 600000+ 75500 Net Revenue Expenses Income 이- 이= 0 이. 이= 0 이 - 20001 = -2000 이- 이= 0 이- 이= 0 0 이- 이 0 580000- 이= 580000 이. 이 0 이 -280000= - 28000 이. 이 이= 0 580000- -300000 28000 350000 200001 FA - 20001FA 1500001A -550010A 3000001A 01-Sepl 4600000A -2800000A 0 805001NC

II 36000 a) Land Value in Balance Sheet b) Net Cash Flow from Operating activities = Net Income + Dividend Paid + Change in Account Receivables + Change in Account Payables 28000 + 2000 - 12000 - 5500 = 12500 II 137500 c) Total Liabilities on Balance Sheet d) Net Cash Flow from Investing Activities Land Sold - Land Purchased 30000 - 15000= II 15000 11 28000 11 58000 11 e) Total expenses from Income Statement f) Service Revenue from Income Statement g) Net Cash Flow from Financing Activities Increase in Stock - Dividend Paid 20000 - 2000 = h) Net Income from Income Statement i) Retained Earnings on Balance Sheet II 18000 28000 75500 =