Apply your knowledge, In Cheesecake Factorys form 10-K for 2016, it indicated that its average cost of build and equip a new Restuanat is approximately $900 per interior squarefoot.

APPLY YOUR Serial Case Pants Pour 20 yards 491 83 (Learning Objective Learning Objectives Calculate depreciation for a new location of a company in the runt industry) To Teusch das Por ase is part of The Cheesecake Factory serial case contained in every chapter in US his hook Ia 2016. The Ches York City restauran scats 240 guests Rather than selling franchi rants, which alla restaurant locati Planning for this NYC Che che Cheesecake Factory Incorporated (NASDAQ: CAKE) opened i estaurant. The new Cheesecake Factory is in Queens and is n New 50 are feet and han selling franchises, Cheesecake Factory own rates all of U.S.resta last count numbered more than 200. It typically has a lease for each cation and depreciates the cost of building a restauranter the We of the case me for this NYC Cheesecake Factory and a few years ago when the former facil Location, Children's Place, closed. Cheesecake Factory officials had been searching Le location for some time and this Queen location seemed to be a good fit. Pri Cheesecake Factory had to have architects draw up building plans to be approved In addition, Cheesecake Factory had to obtain the City's permission to operate a Cafe. Its plans called for outdoor dining during good weather are windows can be es of inclement weather. The last roadblock, the permit for a sidewalk cade, was t officially opened March 2016. Construction started soon thereafter and the res ity in this locatie for a suitable to building. Chee by the city. In addin sidewalk cafe. Its pl. closed in times granted in Marc In Cheesecake Fac and equip a new restaurant is a equipment would tv the like. Leasehold in un months later in late October 2016 Cheesecake Factory's Form 10-K for 2016, it indicates that its average cost to build new restaurant is approximately $900 per interior square foot Furnishings and would typically include booths, chairs, grills, Ovens, refrigerators, plates, glasses, and Leasehold improvements could include walls, flooring, ceilings, windows, doors, light- eating and cooling systems, and similar items. Combined, the estimated cost of this now is $7.965 million. For the purpose of this analysis, assume that 75% of the estimated covers leasehold improvements, with the remainder covering furnishings and equipment. The Cheesecake Factory's fiscal year end is the closest Tuesday to December 31 each year. Partial year depreci ial year depreciation would be calculated based on the number of whole months out of twelve monu Clue months that the asset is in service the first year. For this analysis, estimate the salvage alue of Cheesecake Factory's plant and equipment as 10% of the original cost. To follow are excerpts from Cheesecake Factory's 2016 Form 10-K related to its property and equipment. We currently lease all of our restaurants and utilise capital for leasehold improve ments and furnishings, fixtures and equipment ("FF&E") to build out our restau- rant premises. Total costs are targeted at approximately $900 per interior square foot for The Cheesecake Factory restaurants. (Source: Page 4, Description of Business) We record property and equipment at cost less accumulated depreciation Improve ments are capitalized while repairs and maintenance costs are expensed as incurred The useful life of property and equipment and the determination as to what constides a capitalized cost versus a repair and maintenance expense imalve judgment by arement, which may produce materially different amounts of repairs and maintenance or depreciation expense than if different assumptions were used. (Source: Page 39 Critical Accounting Policies in Management's Discussion and Analysis) We record property and equipment at cost less accumulated depreciation Improve ments are capitalized while repairs and maintenance costs are expensed as incurred. Depreciation and amortization are calculated using the straight-line method over the estimated useful life of the assets or the lease term, whichever is shorter Leasehold improvements include the cost of our internal development and construction ment. Depreciation and amortization periods are as follows: Buildings and land improvements 25 to 30 years Leasehold improvements 10 to 30 years Furnishings, fixtures and equipment 3 to 15 years Computer software and equipment 3 to 5 years Gains and losses related to property and equipment disposals are recorded in interest and other expenses, net. (Source: Page 51, Notes to Consolidated Financial Statements Data from the U.S. Securities and Exchange Commission EDGAR Company Filings. www.sec.gov Requirements 1. Assume that the Cheesecake Factory paid cash for all costs of building and equipping its new restaurant in NYC. How would its assets, liabilities, and equity each be impacted by the construction and opening of this restaurant in 2016? (Ignore the impact of depreciation when answering this question.) 2. On which 2016 financial statement would you find the costs of building and equipping this new restaurant? 3. Which financial statement(s) would be impacted by depreciation on the new restaurant and its furniture and fixtures? 4. Calculate the total depreciation expense related to this new restaurant's property and equipment for: a. 2016 (assume two months of depreciation in 2016) b. 2017 5. What would the net book value of the NYC Queens restaurant's property and equipmc at the end of fiscal year 2017? APPLY YOUR Serial Case Pants Pour 20 yards 491 83 (Learning Objective Learning Objectives Calculate depreciation for a new location of a company in the runt industry) To Teusch das Por ase is part of The Cheesecake Factory serial case contained in every chapter in US his hook Ia 2016. The Ches York City restauran scats 240 guests Rather than selling franchi rants, which alla restaurant locati Planning for this NYC Che che Cheesecake Factory Incorporated (NASDAQ: CAKE) opened i estaurant. The new Cheesecake Factory is in Queens and is n New 50 are feet and han selling franchises, Cheesecake Factory own rates all of U.S.resta last count numbered more than 200. It typically has a lease for each cation and depreciates the cost of building a restauranter the We of the case me for this NYC Cheesecake Factory and a few years ago when the former facil Location, Children's Place, closed. Cheesecake Factory officials had been searching Le location for some time and this Queen location seemed to be a good fit. Pri Cheesecake Factory had to have architects draw up building plans to be approved In addition, Cheesecake Factory had to obtain the City's permission to operate a Cafe. Its plans called for outdoor dining during good weather are windows can be es of inclement weather. The last roadblock, the permit for a sidewalk cade, was t officially opened March 2016. Construction started soon thereafter and the res ity in this locatie for a suitable to building. Chee by the city. In addin sidewalk cafe. Its pl. closed in times granted in Marc In Cheesecake Fac and equip a new restaurant is a equipment would tv the like. Leasehold in un months later in late October 2016 Cheesecake Factory's Form 10-K for 2016, it indicates that its average cost to build new restaurant is approximately $900 per interior square foot Furnishings and would typically include booths, chairs, grills, Ovens, refrigerators, plates, glasses, and Leasehold improvements could include walls, flooring, ceilings, windows, doors, light- eating and cooling systems, and similar items. Combined, the estimated cost of this now is $7.965 million. For the purpose of this analysis, assume that 75% of the estimated covers leasehold improvements, with the remainder covering furnishings and equipment. The Cheesecake Factory's fiscal year end is the closest Tuesday to December 31 each year. Partial year depreci ial year depreciation would be calculated based on the number of whole months out of twelve monu Clue months that the asset is in service the first year. For this analysis, estimate the salvage alue of Cheesecake Factory's plant and equipment as 10% of the original cost. To follow are excerpts from Cheesecake Factory's 2016 Form 10-K related to its property and equipment. We currently lease all of our restaurants and utilise capital for leasehold improve ments and furnishings, fixtures and equipment ("FF&E") to build out our restau- rant premises. Total costs are targeted at approximately $900 per interior square foot for The Cheesecake Factory restaurants. (Source: Page 4, Description of Business) We record property and equipment at cost less accumulated depreciation Improve ments are capitalized while repairs and maintenance costs are expensed as incurred The useful life of property and equipment and the determination as to what constides a capitalized cost versus a repair and maintenance expense imalve judgment by arement, which may produce materially different amounts of repairs and maintenance or depreciation expense than if different assumptions were used. (Source: Page 39 Critical Accounting Policies in Management's Discussion and Analysis) We record property and equipment at cost less accumulated depreciation Improve ments are capitalized while repairs and maintenance costs are expensed as incurred. Depreciation and amortization are calculated using the straight-line method over the estimated useful life of the assets or the lease term, whichever is shorter Leasehold improvements include the cost of our internal development and construction ment. Depreciation and amortization periods are as follows: Buildings and land improvements 25 to 30 years Leasehold improvements 10 to 30 years Furnishings, fixtures and equipment 3 to 15 years Computer software and equipment 3 to 5 years Gains and losses related to property and equipment disposals are recorded in interest and other expenses, net. (Source: Page 51, Notes to Consolidated Financial Statements Data from the U.S. Securities and Exchange Commission EDGAR Company Filings. www.sec.gov Requirements 1. Assume that the Cheesecake Factory paid cash for all costs of building and equipping its new restaurant in NYC. How would its assets, liabilities, and equity each be impacted by the construction and opening of this restaurant in 2016? (Ignore the impact of depreciation when answering this question.) 2. On which 2016 financial statement would you find the costs of building and equipping this new restaurant? 3. Which financial statement(s) would be impacted by depreciation on the new restaurant and its furniture and fixtures? 4. Calculate the total depreciation expense related to this new restaurant's property and equipment for: a. 2016 (assume two months of depreciation in 2016) b. 2017 5. What would the net book value of the NYC Queens restaurant's property and equipmc at the end of fiscal year 2017