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The following events apply to Gulf Seafood for the Year 1 fiscal year: 1. The company started when it acquired $19,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $14,500 cash. 3. Earned $20,900 in cash revenue. 4. Paid $11,300 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 $2,500. 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 activities be affected by depreciation in Year 1 ? 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), a financing activity (FA), or net change in cash (NC). If the element is not affected by the event, leave the cell blank. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells will require entry.) 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 ? Golden Manufacturing Company started operations by acquiring $102,000 cash from the issue of common stock. On January 1 , Year 1 , the company purchased equipment that cost $92,000 cash, had an expected useful life of five years, and had an estimated salvage value of $9,200. Golden Manufacturing earned $85,260 and $60,800 of cash revenue during Year 1 and Year 2, respectively. Golden Manufacturing uses double-declining-balance depreciation. Required a. Record the above transactions in a horizontal statements model. b-1. Prepare income statements for Year 1 and Year 2. b-2. Prepare balance sheets for Year 1 and Year 2. b-3. Prepare statements of cash flows for Year 1 and Year 2. not round intermediate calculations. Round the final answers to nearest dollar amount. Not all cells will require entry.) Prepare income statements for Year 1 and Year 2. (Do not round intermediate calculations. Round the final answers to nearest dollar amount.) Prepare balance sheets for Year 1 and Year 2. (Do not round intermediate calculations. Round the final answers to nearest dollar amount.) Prepare statements of cash flows for Year 1 and Year 2. (Cash outflows should be indicated with a minus sign. Do not round intermediate calculations. Round the final answers to nearest dollar amount.)
