Exercise 6-7A (Algo) Effect of depreciation on the accounting equation and financial statements LO 6-2 The following events apply to Gulf Seafood for the Year 1 fiscal year. 1. The company started when it acquired $17.000 cash by issuing common stock 2. Purchased a new cooktop that cost $15,500 cash 3. Earned $22,100 in cash revenue 4. Paid $11,800 cash for salaries expense 5. Adjusted the records to reflect the use of the cooktop Purchased on January 1, Year 1, the cooktop has an expected useful life of four years and an estimated salvage value of $2,600 Use straight line depreciation. The adjusting entry was made as of December 31, Year 1 Required a. Record the above transactions in a horizontal statements model b. What amount of depreciation expense would Gulf Seafood report on the Year 1 income statement? c. What amount of accumulated depreciation would Gulf Seafood report on the December 31 Year 2. balance sheet? d. Would the cash flow from operating activimes be affected by depreciation in Year 1? Complete this question by entering your answers in the tabs below. RA Ray too Record the above transactions in a horizontal statements model. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA) .financing activity (FA), or not change in cash (NC). If the element is not affected by the event, leave the call blank. Enter any decreases to account balances and cash outflow with a minus sign. Not all cells will require entry) raded Homework Rega Reg to D Record the above transactions in a horizontal statements model. (in the Cash Flow column, indicate whether the item is an operating activity (OA), an investing (IA), a financing activity (FA), of net change in cash (NC). If the element is not affected by the event, leave the call lank. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells will require entry) OABOO aHa HFH Hi ht t 18 HH CHI Flus Ewy Contion Read Laming 1 2 3 Ol . Bal Rega Reg BioD> 5 of 5 Next