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 $18,000 casti by issuing common stock 2. Purchased a new cooktop that cost $13,200 cash 3. Farned $21,900 in cash revemue. 4. Paid $10,600 cash for salaties expense: 5. Adjusted the records to reflect the use of the cooktop. Purchased on Januney 1, Year 1, the cooktop has an expected usefill life of four year, and an estimated salvage value of $2,600. Use straighte-line depreciation. The adjusting entry was made as of Decembut 31, Year 1. Required a. Record the above transactions ifi a horizontal statements model. b. What amount of depreciation expense would Guir Seafood report on the Year 1 income statement? c. What amount of accumulated depreciation would Gull Seafood report on the December 31, Year 2, batancesticer? d. Would the cash flow from operating activilies be affected by depreciation in Year 1 ? Complete this question by entering your answers in the tabs below. Record the above transactions in a horlzontal statements model, (In the Cash flow column, indicate whether the item is an operating activity (OA), an invectiog octivity) (LA), a finanking activity (FA), or net change in cash (NC). If the element is not affected by the event, leave the cell blank. Fnter any ifecreares to acount balonces and cash outhlows wi the minus sign. Not all cells will rogaire entry) What a report on the December 31, Year 2, balance sheet? 1. Would the cash flow from operating activities be affected by depreciation in Year 1 ? Complete this question by entering your answers in the tabs below. 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 activities be affected by depreciation in Year 1