(Learning Objectives 1, 3, 8: Report plant assets, depreciation, and investing cashflows) On January 1, 2018, Little City Bar & Grill purchased a building, paying $58,000 cashand signing a $110,000 note payable. The company paid another $62,000 to remodel thebuilding. Furniture and fixtures cost $55,000, and dishes and supplies—a current asset—wereobtained for $9,400. All expenditures were for cash. Assume that all of these expendituresoccurred on January 1, 2018.Little City is depreciating the building over 25 years using the straight-line method, with anestimated residual value of $51,000. The furniture and fixtures will be replaced at the end of fiveyears and are being depreciated using the double-declining-balance method, with a residual valueof zero. At the end of the first year, the company still had dishes and supplies worth $1,300.Show what the company reported for supplies, plant assets, and cash flows at the end of thefirst year on its■ income statement,■ balance sheet, and■ statement of cash flows (investing only).Note: The purchase of dishes and supplies is an operating cash flow because supplies are acurrent asset.
(Learning Objectives 1, 3, 8: Report plant assets,
flows
and signing a $110,000 note payable. The company paid another $62,000 to remodel the
building. Furniture and fixtures cost $55,000, and dishes and supplies—a current asset—were
obtained for $9,400. All expenditures were for cash. Assume that all of these expenditures
occurred on January 1, 2018.
Little City is depreciating the building over 25 years using the straight-line method, with an
estimated residual value of $51,000. The furniture and fixtures will be replaced at the end of five
years and are being depreciated using the double-declining-balance method, with a residual value
of zero. At the end of the first year, the company still had dishes and supplies worth $1,300.
Show what the company reported for supplies, plant assets, and cash flows at the end of the
first year on its
■ income statement,
■
■ statement of cash flows (investing only).
Note: The purchase of dishes and supplies is an operating cash flow because supplies are a
current asset.
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