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.) Boothe Company paid $9,000 to extend the useful life of one of its assets. How will this expenditure affect Boothe's financial statements?AssetsLiabilitiesStk. EquityRevenuesExpensesNetStmt. of ?IncomeCash Flows???????
What will be an ideal response?
(NA) (NA) (NA) (NA) (NA) (NA) (D)
An expenditure that extends an asset's useful life decreases assets (cash) and increases assets (by decreasing accumulated depreciation, a contra asset account), resulting in no net effect on total assets. The expenditure is reported as a cash outflow for investing activities on the statement of cash flows.
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