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 $16,000 cash. 3. Earned $21,300 in cash revenue. 4. Paid $11,800 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 $2,600. 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? Complete this question by entering your answers in the tabs below. Req A Req B to D Record the above transactions in a horizontal statements model. (In the Cash Flow column, indicate whether the item is an operating 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 decreas cash outflows with a minus sign. Not all cells will require entry.) Balance Sheet GULF SEAFOOD Horizontal Statements Model Income Statement Statement of Cash Flows Expense =Net Income Event Assets Equity Cash + BV Equipment Common Stock Retained Earnings Revenue 1. 2. + + = 3. + + 4. + = =1 5. + = Bal. 0+ 0= + - 0+ 0 0 0 = Req A Req B to D > 0 0
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 $16,000 cash. 3. Earned $21,300 in cash revenue. 4. Paid $11,800 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 $2,600. 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? Complete this question by entering your answers in the tabs below. Req A Req B to D Record the above transactions in a horizontal statements model. (In the Cash Flow column, indicate whether the item is an operating 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 decreas cash outflows with a minus sign. Not all cells will require entry.) Balance Sheet GULF SEAFOOD Horizontal Statements Model Income Statement Statement of Cash Flows Expense =Net Income Event Assets Equity Cash + BV Equipment Common Stock Retained Earnings Revenue 1. 2. + + = 3. + + 4. + = =1 5. + = Bal. 0+ 0= + - 0+ 0 0 0 = Req A Req B to D > 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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 $16,000 cash.
3. Earned $21,300 in cash revenue.
4. Paid $11,800 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 $2,600. 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?
Complete this question by entering your answers in the tabs below.
Req A
Req B to D
Record the above transactions in a horizontal statements model. (In the Cash Flow column, indicate whether the item is an operating 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 decreas
cash outflows with a minus sign. Not all cells will require entry.)
Balance Sheet
GULF SEAFOOD
Horizontal Statements Model
Income Statement
Statement of Cash
Flows
Expense
=Net Income
Event
Assets
Equity
Cash
+
BV
Equipment
Common
Stock
Retained
Earnings
Revenue
1.
2.
+
+
=
3.
+
+
4.
+
=
=1
5.
+
=
Bal.
0+
0=
+
-
0+
0
0
0 =
Req A
Req B to D >
0
0
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