Indicate how each event affects the elements of the financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter amounts. Increase = IDecrease = DNo Effect = NA(Note that "No Effect" means that the event does not effect that element of the financial statements or that the event causes an increase in that element that is offset by a decrease in that same element.) Shelton Robotics Company amortized $30,400 of patent cost. How does this entry affect Shelton's financial statements?AssetsLiabilitiesStk. EquityRevenuesExpensesNetStmt. of ?IncomeCash Flows???????
What will be an ideal response?
(D) (NA) (D) (NA) (I) (D) (NA)
Amortizing the cost of an intangible asset decreases assets (patent) and stockholders' equity (retained earnings). It increases expenses (amortization expense), which decreases net income. It does not affect the statement of cash flows.
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with an example. What will be an ideal response?
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