1. The company started when it acquired $18,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $15,200 cash. 3. Earned $20,100 in cash revenue. 4. Paid $12,000 cash for salaries expense. 5. 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 $2,000. Use straight-line depreciation. The adjustment was made as of December 31, Year 1. Required a. Record the above transactions in a horizontal statements model. (In the Statement of Cash Flows column, use the initials (OA), an investing activity (IA), a financing activity (FA) and net change in cash (NC). Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input.) Event 1. 2. 3. 4. 5. Bal. Cash Assets + + + + + ++ 0+ Balance Sheet Equipment (BV) = = = 0 = GULF SEAFOOD Horizontal Statements Model Stockholder's Equity Common Stock + + + + + 0 + Retained Earnings 0 Revenue 0 Income Statement Expense = = = = = = 0= Net Income 0 Statement of Cash Flows 0

1. The company started when it acquired $18,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $15,200 cash. 3. Earned $20,100 in cash revenue. 4. Paid $12,000 cash for salaries expense. 5. 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 $2,000. Use straight-line depreciation. The adjustment was made as of December 31, Year 1. Required a. Record the above transactions in a horizontal statements model. (In the Statement of Cash Flows column, use the initials (OA), an investing activity (IA), a financing activity (FA) and net change in cash (NC). Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input.) Event 1. 2. 3. 4. 5. Bal. Cash Assets + + + + + ++ 0+ Balance Sheet Equipment (BV) = = = 0 = GULF SEAFOOD Horizontal Statements Model Stockholder's Equity Common Stock + + + + + 0 + Retained Earnings 0 Revenue 0 Income Statement Expense = = = = = = 0= Net Income 0 Statement of Cash Flows 0

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter19: Accounting For Plant Assets, Depreciation, And Intangible Assets

Section: Chapter Questions

Problem 2AP

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Jada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it Paid $500 for ordinary repair Purchased a patent for $45,000 cash Paid $200,000 cash for addition to an existing building Paid $60,000 for monthly salaries Paid $250 for routine maintenance on equipment Paid $10,000 for extraordinary repairs If all transactions were recorded properly, what amount did Jada capitalize for the year, and what amount did Jada expense for the year?
Johnson, Incorporated, had the following transactions during the year: Purchased a building for $5,000,000 using a mortgage for financing Paid $2,000 for ordinary repair on a piece of equipment Sold product on account to customers for $1,500,600 Paid $20,000 cash to add a storage shed in the corner of an existing building Paid $360,000 in monthly salaries Paid $25,000 for routine maintenance on equipment Paid $110,000 for extraordinary repairs Depreciation expense recorded for the year is $15,000. If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Johnsons balance sheet resulting from this years transactions? What amount did Johnson report on the income statement for expenses for the year?
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