Question: Assume that on January 1 2014 an Early Risers Caf

Assume that on January 1, 2014, an Early Risers Café purchased a building, paying $54,000 cash and signing a $104,000 note payable. The restaurant paid another $65,000 to remodel the building. Furniture and fixtures cost $51,000, and dishes and supplies—a current asset—were obtained for $9,000. All expenditures were for cash. Assume that all of these expenditures occurred on January 1, 2014.
Early Risers Café is depreciating the building over 25 years by the straight-line method, with estimated residual value of $50,000. The furniture and fixtures will be replaced at the end of five years and are being depreciated by the double-declining-balance method, with zero residual value. At the end of the first year, the restaurant still has dishes and supplies worth $1,600. Show what the restaurant will report for supplies, plant assets, and cash flows at the end of the first year on its
Income statement,
Balance sheet, and
Statement of cash flows (investing only).

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  • CreatedJuly 25, 2014
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