Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter dollar amounts. (Note that "Not Affected" means that the event does not affect that element of the financial statements or the event causes an increase in that element that is offset by a decrease in the same element.)Increase = IDecrease = DNot Affected = NAShelton Robotics Company amortized $30,400 of patent cost. How does this event affect Shelton's financial statements?AssetsLiabilitiesStk. EquityRevenuesExpensesNet IncomeStmt of Cash 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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