Question

Waddell Company had the following balances in its accounting records as of December 31, Year 1: Liabilities and Equity Accounts Payable Assets $ 7,500 $35,000 9,000 Cash points Accounts Receivable Common Stock 40,000 47,500 Retained Earnings 51,000 Land $95,000 $95,000 Total Total The following accounting events apply to Waddell Company's Year 2 fiscal year: 1 Acquired $20,000 cash from the issue of common stock. 1 Paid $6,000 cash in advance for a one-year lease for office space. 1 Paid a $2,000 cash dividend to the stockholders. 1 Purchased additional land that cost $15,000 cash. 1 Made a cash payment on accounts payable of $5,500. 1 Received $9,600 cash in advance as a retainer for services to be performed monthly over the coming year. 1 Sold land for $30,000 cash that had originally cost $30,000. 1 Purchased $2,500 of supplies on account. 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. Jan. Feb. Mar. Apr. May July Sept. Oct. Dec.

Answer 1

a)	Land		36,000
b)	Net cash from operating activities		44,100
c)	Rent expense		5,500
d)	Total Liabilites		8,500	(7500-5500+6500)
e)	Supplies expense		2,450
f)	Unearned revenue		1,15,200	(9600*12)
g)	Net cash from investing activities		15,000
h)	Total Expense		40,500	(6000+28000+6500)
i)	Service Revenue		1,73,200	(58000+115200)
j)	Cash from financing activities		18,000
k)	net income		1,32,700	(-6000+115200+58000-28000-6500)
l)	Retained earning		45,500	(47500-2000)