The following events apply to The Pizza Factory for the 2008 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 1,2008, 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, 2008.

Required:

a. Record the above transactions in a horizontal statements model like the following one.

b. What amount of depreciation expense would The Pizza Factory report on the 2009 income statement?

c. What amount of accumulated depreciation would The Pizza Factory report on the December 31, 2009, balance sheet?

d. Would the cash flow from operating activities be affected by depreciation in 2009?

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Assets Balance Sheet Event Com. Cash + Equip. A. Depr. = Equity Income Statement Statemt. of Rev. - Exp. = Net Inc. Cash Flows Ret. Stock + Earn.