Received $9,600 cash in advance as a retainer for services to be performed month
ID: 2424326 • Letter: R
Question
Received $9,600 cash in advance as a retainer for services to be performed monthly over the coming year.
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.)
What two additional adjusting entries need to be made at the end of the year? (Select all that apply.)
What amount of net cash flow from operating activities would be reported on the statement of cash flows? (Enter cash outflows as negative amounts.)
What amount of rent expense would be reported on the income statement? (Do not round intermediate calculations.)
What amount of unearned revenue would be reported on the balance sheet? (Do not round intermediate calculations.)
What amount of net cash flow from investing activities would be reported on the statement of cash flows? (Enter cash outflows as negative amounts.)
What amount of total expenses would be reported on the income statement? (Do not round intermediate calculations.)
What total amount of service revenue would be reported on the income statement? (Do not round intermediate calculations.)
What amount of cash flows from financing activities would be reported on the statement of cash flows? (Enter cash outflows as negative amounts.)
What amount of net income would be reported on the income statement? (Do not round intermediate calculations.)
What amount of retained earnings would be reported on the balance sheet? (Do not round intermediate calculations.)
Waddell Company had the following balances in its accounting records as of December 31, 2015:
Explanation / Answer
a)
Account titles and explanation
Debit
Credit
Prepaid rent
500
Rent
500
Salary
6500
Accrued Salary
6500
b)
Waddell report for land on the balance sheet
Land as on December 31,2015
51000
Add-Purchase on April 1
15000
Less- sold on September 1
30000
Land on December 31,2016
36000
d)
Rent paid for one year in advance on February 1 = $6000
Rent expense would be reported on the income statement = 11 months (February to December)
= $6000 *11/12
= $5500
e)
Total liabilities would be reported on the balance sheet=
Account payable = $7500 - $5500 = 2000
+ supplies purchase on credit = $2500
+Accrued salaries expense = $6,500
Total liabilities = $11000
f)
Supplies expense would be reported on the income statement
Purchased of supplies on account= $2,500
Less-supplies on hand at the end of the period = $50
Supplies expense would be reported on the income statement = $2450
g)
Amount of unearned revenue would be reported on the balance sheet= 9600
h) Net cash flow from investing activities would be reported on the statement of cash flows=
$51000 - $ 36000
= $15000
I ) Total expenses would be reported on the income statement =
Rent =$5500
Other operating exp = $28000
Salaries exp = $6500
Supplies exp = 2450
Total exp = $ 36950
Account titles and explanation
Debit
Credit
Prepaid rent
500
Rent
500
Salary
6500
Accrued Salary
6500
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