Required information Exercise 8-7A 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 $31.000 cash by issuing common stock 2. Purchased a new cooktop that cost $12,500 cash. 3. Earned $22.800 in cash revenue. 4. Pald $13,400 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 $2,600. Use straight-line depreciation. The adjusting entry was made as of December 31. Year 1 Exercise 8-7A Part c. What is the net income for Year 1? Not income ! Required information Exercise 8-7A 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 $31.000 cash by issuing common stock. 2. Purchased a new cooktop that cost $12,500 cash. 3. Earned $22,800 in cash revenue. 4. Paid $13,400 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 $2,600. Use straight-line depreciation. The adjusting entry was made as of December 31, Year 1. Exercise 8-7A Part d d. What amount of depreciation expense would Gulf Seafood report on the Year 2 income statement? Depreciation expense Required information Exercise 8-7A 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 $31,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $12,500 cash. 3. Earned $22,800 in cash revenue. 4. Paid $13.400 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 $2,600. Use straight-line depreciation. The adjusting entry was made as of December 31, Year 1. Exercise 8-7A Parte e. What amount of accumulated depreciation would Gulf Seafood report on the December 31, Year 2, balance sheet? Accumulated detection Required information Exercise 8-7A 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 $31,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $12,500 cash. 3. Earned $22.800 in cash revenue. 4. Paid $13,400 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 $2,600. Use straight-line depreciation. The adjusting entry was made as of December 31, Year 1. Exercise 8-7A part f f. Would the cash flow from operating activities be affected by depreciation in Year 2? Yes No
