The following events apply to Gulf Seafood for the 2018 fiscal year: 1. The company started when
Question:
The following events apply to Gulf Seafood for the 2018 fiscal year:
1. The company started when it acquired $60,000 cash by issuing common stock.
2. Purchased a new cooktop that cost $40,000 cash.
3. Earned $72,000 in cash revenue.
4. Paid $25,000 cash for salaries expense.
5. Adjusted the records to reflect the use of the cooktop. Purchased on January 1, 2018, the cooktop has an expected useful life of four years and an estimated salvage value of $4,000. Use straightline depreciation. The adjusting entry was made as of December 31, 2018.
Required
a. Record the previous transactions in a horizontal statements model like the following one.
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b. What amount of depreciation expense would Gulf Seafood report on the 2018 income statement?
c. What amount of accumulated depreciation would Gulf Seafood report on the December 31, 2019, balance sheet?
d. Would the cash flow from operating activities be affected by depreciation in 2018?
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
Step by Step Answer:
a Balance Sheet Income Statement Statement of Assets Equity Rev Exp Net Inc C...View the full answer
Survey of Accounting
ISBN: 978-1259631122
5th edition
Authors: Thomas Edmonds, Christopher Edmonds, Philip Olds, Frances McNair, Bor Yi Tsay
