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Wildcat Corporation has the following transactions with Falcon Incorporated.
Required:
1. For each transaction, indicate whether Wildcat would report the related account in the balance sheet or income statement.
2. 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.
3. Indicate whether each transaction is classified as operating, investing, or financing activity.
Transactions
Wildcat's Related Account
Financial Statement
Account
Activity
1. Wildcat issues common stock to Falcon.
Common stock
2. Wildcat lends to Falcon by accepting a note.
Notes receivable
3. Wildcat receives services from Falcon.
Service fee expense
4. Wildcat receives interest from Falcon on lending.
Interest revenue
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