The following information applies to the questions displayed below) The followin
ID: 2600457 • Letter: T
Question
The following information applies to the questions displayed below) The following events apply to Gulf Seafood for the 2016 flscal year 1 The company started when It acquired $60,000 cash by Issuing common stock 2. Purchased a new cooktop that cost $40,000 cash. 3. Earned $72,000 In cash revenue 4. Paid $25,000 cash for salaries expense. 5. Adjusted the records to refiect the use of the cooktop. Purchased on January 1, 2016, the cooktop has an expected useful life of four years and an estimated salvage value of $4,000. Use straight-line depreciation The adjusting entry was made as of December 31, 2016 3. 10.00 points a. Record the events in general journal format and post to T-accounts. (If no entry is required for a transactionievent, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record entry for issuance of common stock 0 F2 F7Explanation / Answer
Cost of cooktop - $40,000
Salvage value $4,000
Depreciable value $36,000
Estimated life 4 years
Annual depreciation 9,000
b.
c.
d.
Since the equipment is depreciated on straight line method, the annual depreciation expense will be the same for all the years i.e., $9,000
e.
Acumulated depreciation = $18,000
($9,000 for 2016 + $9,000 for 2017)
f.
Yes
GULF SEAFOOD General journal for the year 2016 Ref Account title Debit Credit 1 Cash 60000 Common stock 60000 2 Equipment - Cooktop 40000 Cash 40000 3 Cash 72000 Revenue 72000 4 Salaries expense 25000 Cash 25000 5 Depreciation expense 9000 Accumulated depreciation - Equipment 9000 6 Revenue 72000 Salaries expense 25000 Depreciation expense 9000 Income summary 38000Related Questions
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