The following events apply to Gulf Seafood for the Year 1 fiscal year: The company started when it acquired $17,000 cash by issuing common stock. Purchased a new cooktop that cost $16,400 cash. Earned $20,800 in cash revenue. Paid $10,400 cash for salaries expense. 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 $2,100. Use straight-line depreciation. The adjusting entry was made as of December 31, Year 1. Record the above transactions in a horizontal statements model.

What amount of depreciation expense would Gulf Seafood report on the Year 1 income statement?

What amount of accumulated depreciation would Gulf Seafood report on the December 31, Year 2, balance sheet?

Would the cash flow from operating activities be affected by depreciation in Year 1?

\begin{tabular}{|l|l|} \hline b. Depreciation expense on Year 1 income statement & \\ \hline c. Accumulated depreciation on December 31, Year 2, balance sheet & \\ \hline d. Would the cash flow from operating activities be affected by depreciation in Year 1? & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{15}{|c|}{ GULF SEAFOOD } \\ \hline \multicolumn{15}{|c|}{ Horizontal Statements Model } \\ \hline \multirow{3}{*}{ Event } & \multicolumn{7}{|c|}{ Balance Sheet } & \multicolumn{5}{|c|}{ Income Statement } & \multirow{3}{*}{\multicolumn{2}{|c|}{\begin{tabular}{c} Statement of Cash \\ Flows \end{tabular}}} \\ \hline & \multicolumn{3}{|c|}{ Assets } & \multirow{2}{*}{\begin{tabular}{l} = \\ = \end{tabular}} & \multicolumn{3}{|c|}{ Stockholders' Equity } & \multirow[b]{2}{*}{ Revenue } & \multirow[b]{2}{*}{-} & \multirow[b]{2}{*}{ Expenses } & \multirow[b]{2}{*}{=} & \multirow[b]{2}{*}{ Net Income } & & \\ \hline & Cash & + & \begin{tabular}{c} Book Value of \\ Equipment \end{tabular} & & \begin{tabular}{l} Common \\ Stock \end{tabular} & + & \begin{tabular}{l} Retained \\ Earnings \end{tabular} & & & & & & & \\ \hline 1. & & + & & = & & + & & & - & & = & P & | & p \\ \hline 2. & & + & & = & & + & & & - & & = & & & P \\ \hline 3. & & + & & = & & + & & & - & & = & & 7 & p \\ \hline 4. & & + & & = & & + & & & - & & = & 7 & 7 & F \\ \hline 5. & & + & & = & & + & & & - & & = & & | & 7 \\ \hline Balance & 0 & + & 0 & = & 0 & + & 0 & 0 & - & 0 & = & 0 & 0 & NC \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline b. Depreciation expense on Year 1 income statement & \\ \hline c. Accumulated depreciation on December 31, Year 2, balance sheet & \\ \hline d. Would the cash flow from operating activities be affected by depreciation in Year 1? & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{15}{|c|}{ GULF SEAFOOD } \\ \hline \multicolumn{15}{|c|}{ Horizontal Statements Model } \\ \hline \multirow{3}{*}{ Event } & \multicolumn{7}{|c|}{ Balance Sheet } & \multicolumn{5}{|c|}{ Income Statement } & \multirow{3}{*}{\multicolumn{2}{|c|}{\begin{tabular}{c} Statement of Cash \\ Flows \end{tabular}}} \\ \hline & \multicolumn{3}{|c|}{ Assets } & \multirow{2}{*}{\begin{tabular}{l} = \\ = \end{tabular}} & \multicolumn{3}{|c|}{ Stockholders' Equity } & \multirow[b]{2}{*}{ Revenue } & \multirow[b]{2}{*}{-} & \multirow[b]{2}{*}{ Expenses } & \multirow[b]{2}{*}{=} & \multirow[b]{2}{*}{ Net Income } & & \\ \hline & Cash & + & \begin{tabular}{c} Book Value of \\ Equipment \end{tabular} & & \begin{tabular}{l} Common \\ Stock \end{tabular} & + & \begin{tabular}{l} Retained \\ Earnings \end{tabular} & & & & & & & \\ \hline 1. & & + & & = & & + & & & - & & = & P & | & p \\ \hline 2. & & + & & = & & + & & & - & & = & & & P \\ \hline 3. & & + & & = & & + & & & - & & = & & 7 & p \\ \hline 4. & & + & & = & & + & & & - & & = & 7 & 7 & F \\ \hline 5. & & + & & = & & + & & & - & & = & & | & 7 \\ \hline Balance & 0 & + & 0 & = & 0 & + & 0 & 0 & - & 0 & = & 0 & 0 & NC \\ \hline \end{tabular}