Maps aded) i Saved Required Information Exercise 8-7A (Algo) Effect of depreciation on the accounting equation and financial statements LO 8-2 [The following information applies to the questions displayed below] The following events apply to Gulf Seafood for the Year 1 fiscal year: 1. The company started when it acquired $35,000 cash by Issuing common stock. 2. Purchased a new cooktop that cost $16,600 cash. 3. Earned $22,800 in cash revenue. 4. Paid $14,400 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 five years and an estimated salvage value of $3,000. Use straight-line depreciation. The adjusting entry was made as of December 31, Year 1. Exercise 8-7A (Algo) Part a Required a. Record the events in general journal format and post to T-accounts. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Mout Required information Req A1 Req A2 Record the events in general journal. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < A B C D E Record entry for issuance of common stock. Note: Enter debits before credits. Event 1 General Journal Debit Credit Record entry Clear entry View general journal 8 Prev 11 12 13 16 of 201 Next > Required information Req A1 Req A2 Record the events in general journal. (If no entry is required for a transaction/event, select "No journal entry rec account field.) View transaction list Journal entry worksheet ht < A B C D E ences Record purchase of equipment for cash. Note: Enter debits before credits. Event 2 General Journal Debit Credit > Record entry Clear entry View general journal < Prev 11 12 13 922 16 of 20 View transaction list Journal entry worksheet < A B C D E Record cash received from revenue. Note: Enter debits before credits. Event 3 General Journal Debit Credit Record entry Clear entry View general journal < Prev 11 12 13 822 9 16 of 20 Req A1 Req A2 6 Record the events in general journal. (If no entry is required for a transaction/event, select "No journal entry required" in ti account field.) View transaction list Journal entry worksheet nt < A B C D E ences Record cash paid for salaries expenses. Note: Enter debits before credits. Event 4 General Journal Debit Credit Record entry Clear entry View general journal nts Hint View transaction list Journal entry worksheet < A B C D E Print eferences Record depreciation expense. Note: Enter debits before credits. Event 5 General Journal Debit Credit Record entry Clear entry View general journal 1 of 6 Required information Beginning Balance Cash Beginning Balance Equipment Cooktop Ending Balance Ending Balance nt Accumulated Depreciation Common Stock Beginning Balance Beginning Balance int ences Ending Balance Ending Balance Sales Revenue Salaries Expense Beginning Balance Beginning Balance Ending Balance Ending Balance Depreciation Expense Beginning Balance Ending Balance art 2 of 6 Required information b. Prepare a balance sheet and a statement of cash flows for the Year 1 accounting period. Complete this question by entering your answers in the tabs below. pints Req B1 Req B2 Hint Print References Prepare a balance sheet for the Year 1 accounting period. (Enter amounts to be deducted with a minus sign.). GULF SEAFOOD Balance Sheet As of December 31, Year 1 Ac raw Assets Total Assets Liabilities Stockholders' equity Total Stockholders' Equity Total liabilities and stockholders' equity 0 0 0 Req B1 rt 2 of 6 Req B21 nts Hint Print Prepare a statement of cash flows for the Year 1 accounting period. (Enter cash outflows with a minus sign.) GULF SEAFOOD Statement of Cash Flows For the Year Ended December 31, Year 1 Cash flows from operating activities: eferences Net cash flow from operating activities Cash flows from investing activities: ic raw Net cash flow from investing activities Cash flows from financing activities: Net cash flow from financing activities Net change in cash Ending cash balance ! Required Information Exercise 8-7A (Algo) Effect of depreciation on the accounting equation and financial statements LO 8-2 [The following Information applies to the questions displayed below] The following events apply to Gulf Seafood for the Year 1 fiscal year. 1. The company started when it acquired $35,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $16,600 cash. 3. Earned $22,800 in cash revenue. 4. Paid $14,400 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 five years and an estimated salvage value of $3,000. Use straight-line depreciation. The adjusting entry was made as of December 31, Year 1. Exercise 8-7A (Algo) Part c c. What is the net Income for Year 1? Net income A 14 rt 4 of 6 ts Hint Print ferences Required Information Exercise 8-7A (Algo) Effect of depreciation on the accounting equation and financial staten [The following information applies to the questions displayed below.] The following events apply to Gulf Seafood for the Year 1 fiscal year: 1. The company started when it acquired $35,000 cash by Issuing common stock. 2. Purchased a new cooktop that cost $16,600 cash. 3. Earned $22,800 in cash revenue. 4. Paid $14,400 cash for salaries expense. 5. Adjusted the records to reflect the use of the cooktop. Purchased on January 1, Year 1, the cooktop has useful life of five years and an estimated salvage value of $3,000. Use straight-line depreciation. The ad was made as of December 31, Year 1. Exercise 8-7A (Algo) Part d d. What amount of depreciation expense would Gulf Seafood report on the Year 2 Income statement? Depreciation expense aded) Saved Required Information Exercise 8-7A (Algo) Effect of depreciation on the accounting equation and financial statements [The following information applies to the questions displayed below] The following events apply to Gulf Seafood for the Year 1 fiscal year: 1. The company started when it acquired $35,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $16,600 cash. 3. Earned $22,800 in cash revenue. 4. Paid $14,400 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 expe useful life of five years and an estimated salvage value of $3,000. Use straight-line depreciation. The adjusting e was made as of December 31, Year 1. Exercise 8-7A (Algo) Part e e. What amount of accumulated depreciation would Gulf Seafood report on the December 31, Year 2, balance sheet? Accumulated depreciation. 8 Required Information Exercise 8-7A (Algo) Effect of depreciation on the accounting equation and financial statements LO 8-2 [The following Information applies to the questions displayed below] The following events apply to Gulf Seafood for the Year 1 fiscal year: 1. The company started when it acquired $35,000 cash by Issuing common stock. 2. Purchased a new cooktop that cost $16,600 cash. 3. Earned $22,800 in cash revenue. 4. Pald $14,400 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 five years and an estimated salvage value of $3,000. Use straight-line depreciation. The adjusting entry was made as of December 31, Year 1. Exercise 8-7A (Algo) part f f. Would the cash flow from operating activities be affected by depreciation In Year 2? Yes O NO