Question

Assume that in January 20X6, a Morning Cafe restaurant purchased a building, paying $56,000 cash and signing a $102,000 note payable. The restaurant paid another $64,000 to remodel the building. Furniture and fixtures cost $58,000, and dishes and supplies-a current asset-were obtained for $9,600. Morning Cafe is depreciating the building over 20 years by the straight-line method, with estimated residual value of $57,000. The furniture and fixtures will be replaced at the end of five years and are being depreciated by the double-declining-balance method, with zero residual value. At the end of the first year, the restaurant still has dishes and supplies worth $1,900. Requirement 1. Show what the restaurant will report for supplies, PPE, and cash flows at the end of the first year on its: Income Statement Balance Sheet Statement of Cash Flows (investing only) Note: The purchase of dishes and supplies is an operating cash flow because supplies are a current asset. Requirement 1. Show what the restaurant will report for supplies, PPE, and cash flows at the end of the first year on its Income Statement, Balance Sheet, and Statement of Cash Flows (investing only). Begin with the income statement. Income Statement Expenses:

          Assume that in January 20X6, a Morning Cafe restaurant purchased a building, paying $56,000 cash and signing a $102,000 note payable. The restaurant paid another $64,000 to remodel the building. Furniture and fixtures cost $58,000, and dishes and supplies-a current asset-were obtained for $9,600. Morning Cafe is depreciating the building over 20 years by the straight-line method, with estimated residual value of $57,000. The furniture and fixtures will be replaced at the end of five years and are being depreciated by the double-declining-balance method, with zero residual value. At the end of the first year, the restaurant still has dishes and supplies worth $1,900.
Requirement
1. Show what the restaurant will report for supplies, PPE, and cash flows at the end of the first year on its:
Income Statement
Balance Sheet
Statement of Cash Flows (investing only)
Note: The purchase of dishes and supplies is an operating cash flow because supplies are a current asset.
Requirement 1. Show what the restaurant will report for supplies, PPE, and cash flows at the end of the first year on its Income Statement, Balance Sheet, and Statement of Cash Flows (investing only).
Begin with the income statement.
Income Statement
Expenses:

Assume that in January 20X6, a Morning Cafe restaurant purchased a building, paying 56,000 cash and signing a102,000 note payable. The restaurant paid another 64,000 to remodel the building. Furniture and fixtures cost58,000, and dishes and supplies-a current asset-were obtained for 9,600. Morning Cafe is depreciating the building over 20 years by the straight-line method, with estimated residual value of57,000. The furniture and fixtures will be replaced at the end of five years and are being depreciated by the double-declining-balance method, with zero residual value. At the end of the first year, the restaurant still has dishes and supplies worth 1,900.
Requirement
1. Show what the restaurant will report for supplies, PPE, and cash flows at the end of the first year on its:
Income Statement
Balance Sheet
Statement of Cash Flows (investing only)
Note: The purchase of dishes and supplies is an operating cash flow because supplies are a current asset.
Requirement 1. Show what the restaurant will report for supplies, PPE, and cash flows at the end of the first year on its Income Statement, Balance Sheet, and Statement of Cash Flows (investing only).
Begin with the income statement.
Income Statement
Expenses:

Added by Mark M.

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