Question: The following events apply to Tracey s Restaurant for the 2016

The following events apply to Tracey’s Restaurant for the 2016 fiscal year:
1. Started the company when it acquired $21,000 cash from the issue of common stock.
2. Purchased a new cooktop that cost $22,000 cash.
3. Earned $32,000 in cash revenue.
4. Paid $16,000 cash for salaries expense.
5. Paid $7,000 cash for operating expenses.
6. Adjusted the records to reflect the use of the cooktop. The cooktop, purchased on January 1, 2016, has an expected useful life of five years and an estimated salvage value of $2,000. Use straight-line depreciation. The adjusting entry was made as of December 31, 2016.
a. Write an accounting equation and record the effects of each accounting event under the appropriate general ledger account headings.
b. What amount of depreciation expense would Tracey’s report on the 2017 income statement?
c. What amount of accumulated depreciation would Tracey’s report on the December 31, 2017, balance sheet?
d. Would the cash flow from operating activities be affected by depreciation in 2017?

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  • CreatedApril 20, 2015
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