(Learning Objectives 1, 3, 8: Report plant assets, depreciation, and investing cashflows) On January 1, 2018, Little City Bar & Grill purchased a building, paying $58,000 cashand signing a $110,000 note payable. The company paid another $62,000 to remodel thebuilding. Furniture and fixtures cost $55,000, and dishes and supplies—a current asset—wereobtained for $9,400. All expenditures were for cash. Assume that all of these expendituresoccurred on January 1, 2018.Little City is depreciating the building over 25 years using the straight-line method, with anestimated residual value of $51,000. The furniture and fixtures will be replaced at the end of fiveyears and are being depreciated using the double-declining-balance method, with a residual valueof zero. At the end of the first year, the company still had dishes and supplies worth $1,300.Show what the company reported for supplies, plant assets, and cash flows at the end of thefirst year on its■ income statement,■ balance sheet, and■ statement of cash flows (investing only).Note: The purchase of dishes and supplies is an operating cash flow because supplies are acurrent asset.
(Learning Objectives 1, 3, 8: Report plant assets, depreciation, and investing cash
flows) On January 1, 2018, Little City Bar & Grill purchased a building, paying $58,000 cash
and signing a $110,000 note payable. The company paid another $62,000 to remodel the
building. Furniture and fixtures cost $55,000, and dishes and supplies—a current asset—were
obtained for $9,400. All expenditures were for cash. Assume that all of these expenditures
occurred on January 1, 2018.
Little City is depreciating the building over 25 years using the straight-line method, with an
estimated residual value of $51,000. The furniture and fixtures will be replaced at the end of five
years and are being
of zero. At the end of the first year, the company still had dishes and supplies worth $1,300.
Show what the company reported for supplies, plant assets, and cash flows at the end of the
first year on its
■ income statement,
■
■ statement of cash flows (investing only).
Note: The purchase of dishes and supplies is an operating cash flow because supplies are a
current asset.
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