Assume that in January $20$X$6,$ a Morning Cafe restaurant purchased a building, paying $$50,000$ cash and signing a $$106,000$ note payable. The restaurant paid another $$63,000$ to remodel the

building. Furniture and fixtures cost $$56,000,$ and dishes and supplies$-$a current asset$-$were obtained for $$9,200.$ Morning Cafe is depreciating the building over $20$ years by the straight$-$line

method, with estimated residual value of $$51,000.$ 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 $$1,700.$

Requirement

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: