d. Would the cash flow from operating activities be affected by depreciation in 2012?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

please only d , thanks

statements
The following events apply to The Pizza Factory for the 2011 fiscal year:
1. The company started when it acquired $18,000 cash from the issue of common stock.
2. Purchased a new pizza oven that cost $15,000 cash.
3. Earned $26,000 in cash revenue.
4. Paid $13,000 cash for salaries expense.
5. Paid $6,000 cash for operating expenses.
6.
Adjusted the records to reflect the use of the pizza oven. The oven, purchased on January 1,
2011, 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, 2011.
Required
a. Record the events in general journal format and post to T-accounts.
b. What amount of depreciation expense would The Pizza Factory report on the 2012 income
statement?
c.
What amount of accumulated depreciation would The Pizza Factory report on the December 31,
2012, balance sheet?
d. Would the cash flow from operating activities be affected by depreciation in 2012?
Transcribed Image Text:statements The following events apply to The Pizza Factory for the 2011 fiscal year: 1. The company started when it acquired $18,000 cash from the issue of common stock. 2. Purchased a new pizza oven that cost $15,000 cash. 3. Earned $26,000 in cash revenue. 4. Paid $13,000 cash for salaries expense. 5. Paid $6,000 cash for operating expenses. 6. Adjusted the records to reflect the use of the pizza oven. The oven, purchased on January 1, 2011, 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, 2011. Required a. Record the events in general journal format and post to T-accounts. b. What amount of depreciation expense would The Pizza Factory report on the 2012 income statement? c. What amount of accumulated depreciation would The Pizza Factory report on the December 31, 2012, balance sheet? d. Would the cash flow from operating activities be affected by depreciation in 2012?
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Cash Flow Statement Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education