On January 1, 2018, Absolutely Bar & Grill purchased a building, paying $57,000 cash and signing a $100,000 note payable. The company paid another $66,000 to remodel the building. Furniture and fixtures cost $56,000, and dishes and supplies—a current asset—were
On January 1, 2018, Absolutely Bar & Grill purchased a building, paying $57,000 cash and signing a $100,000 note payable. The company paid another $66,000 to remodel the building. Furniture and fixtures cost $56,000, and dishes and supplies—a current asset—were
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 5PA: Jada Company had the following transactions during the year: Purchased a machine for $500,000 using...
Related questions
Question
On January 1,
depreciated using thedouble-declining-balance method, with a residual value of zero. At the end of the first year, the company still had dishes and supplies worth
2018,
Absolutely
Bar & Grill purchased a building, paying
$57,000
cash and signing a
$100,000
note payable. The company paid another
$66,000
to remodel the building. Furniture and fixtures cost
$56,000,
and dishes and
supplies—a
current
asset—were
obtained for
$8,600.
All expenditures were for cash. Assume that all of these expenditures occurred on January 1,
2018.
Absolutely
is depreciating the building over 25 years using the straight-line method, with estimated residual value of
$54,000.
The furniture and fixtures will be replaced at the end of five years and are being $1,900.
Show what the company will report for supplies, plant assets, and cash flows at the end of the first year on its income statement, balance sheet, and statement of cash flows.
Begin with the income statement.
|
Income Statement
|
||
|
Expenses:
|
||
|
|
Depreciation expense - furniture and fixtures
|
|
|
|
Depreciation expense - building
|
|
|
|
Supplies expense
|
|
Now show what the company will report on its balance sheet.
|
Balance Sheet
|
|
|||
|
Current assets:
|
||||
|
|
||||
|
Plant assets:
|
|
|||
|
|
||||
|
Less:
|
||||
|
Less:
|
|
|
Finally, show what to report on the statement of cash flows (investing only). (Use a minus sign or parentheses for cash outflows. )
|
Statement of Cash Flows
|
||
|
Cash Flows from Investing Activities:
|
||
|
Purchase of buildings
|
|
|
|
Purchase of furniture and fixtures
|
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT