Question

The following events apply to Gulf Seafood for the Year 1 fiscal year: The company started when it acquired $20,000 cash by issuing common stock. Purchased a new cooktop that cost $16,100 cash. Earned $23,000 in cash revenue. Paid $10,700 cash for salaries expense. 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

Answer 1

Answer

* Requirement: [Decrease in balances are shown within "( )"]

Event	Cash	Equipment	Accumulated Depreciation	Common Stock	Retained earnings	Revenues	Expenses	Net Income	Statement of Cash Flows
1	$20,000			$20,000					$20,000	Finance Activity
2	($16,100)	$16,100							($16,100)	Investing activity
3	$23,000				$23,000	$23,000		$23,000	$23,000	Operating activities
4	($10,700)				($10,700)		$10,700	($10,700)	($10,700)	Operating activities
5			$3,375		($3,375)		$3,375	($3,375)	NA	NA
Bal	$16,200	$16,100	$3,375	$20,000	$8,925	$23,000	$14,075	$8,925	$16,200