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 $18,000 cash by issuing common stock 2. Purchased a new cooktop that cost $12,600 cash. 3. Earned $22,600 in cash revenue. 4. Paid $10,100 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 $2,000. Use straight-line depreciation. The adjusting entry was made as of December 31, Year 1. References Section Break Exercise B-7A Effect of depreciation on the accounting equation and financial statements LO 8-2 Award: 1.87 points Exercise 8-7A Parta Required a. 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 (LA), a financing activity (FA) and net change in cash (NC). Enter any decreases to account balances and cash outflows with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.) GULF SEAFOOD Horizontal Statements Model Balance Sheet Income Statement Event Assets States Equity Common Retained Stock Earnings Revenue Expense Accumulated Depreciation Cash - Net Income Equipment 1 2 3. 4. 5 The following events apply to Gulf Seafood for the Year 1 fiscal year: 1. The company started when it acquired $18,000 cash by issuing common stock, 2. Purchased a new cooktop that cost $12,600 cash. 3. Earned $22,600 in cash revenue. 4. Paid $10,100 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 $2,000. Use straight-line depreciation. The adjusting entry was made as of December 31, Year 1. References Section Break Exercise 8 7A Effect of depreciation on the accounting equation and financial statements LO 8-2 Award: 1.87 points Exercise 8-7A Part b b. What amount of depreciation expense would Gulf Seafood report on the Year 1 income statement? Depreciation expense (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 $18,000 cash by issuing common stock 2. Purchased a new cooktop that cost $12,600 cash. 3. Earned $22,600 in cash revenue. 4. Paid $10,100 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 $2,000. Use straight-line depreciation. The adjusting entry was made as of December 31, Year 1. References Section Break Exercise 8-7A Effect of depreciation on the accounting equation and financial statements LO 8-2 Award: 1.87 points Exercise 8-7A Part c. What amount of accumulated depreciation would Gulf Seafood report on the December 31, Year 2 balance sheet? Accumulated depreciation 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 $18.000 cash by issuing common stock. 2. Purchased a new cooktop that cost $12,600 cash 3. Earned $22,600 in cash revenue. 4. Paid $10,100 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 $2.000. Use straight-line depreciation. The adjusting entry was made as of December 31. Year 1. References Section Break Exercise 8-7A Effect of depreciation on the accounting equation and financial statements LO 8-2 Award: 1.87 points Exercise 8-7A Part d d. Would the cash flow from operating activities be affected by depreciation in Year 1? Yes ONO
