Question

The following events apply to Gulf Seafood for the Year 1 fiscal year: The company started...

The following events apply to Gulf Seafood for the Year 1 fiscal year:

  1. The company started when it acquired $17,000 cash by issuing common stock.
  2. Purchased a new cooktop that cost $13,700 cash.
  3. Earned $22,000 in cash revenue.
  4. Paid $11,400 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.

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Homework Answers

Answer #1
Horizontotal Statement Model- Gulf
Assets Stockholders’ Equity Income Statement Statement of Cash Flows
+ Common Stock + Retained Revenue - Expense = Net
Event Event Cash + Equipment - Accumulated Depreciation Earnings Income
a. Issuance of Common Stock $17,000.00 + $17,000.00
b. Purchase New Cooktop -$13,700.00 $13,700.00 -$13,700.00 IA
c. Earned Cash Revenue $22,000.00 $22,000.00 $22,000.00 $22,000.00 OA
c. Paid Salaries Expense -$11,400.00 $11,400.00 -$11,400.00 -$11,400.00 OA
d Depreciation xpense
(13700-2000)/4		 $2,925.00 $2,925.00 -$2,925.00
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