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 amounts. Enter only one letter for each element.Increase = IDecrease = DNo Effect = NThe Fisher Company paid $28,000 to improve the quality of a manufacturing machine. How will this expenditure affect Fisher's financial statements?AssetsLiabilitiesEquityRevenuesExpensesNetIncomeCash Flow? ?????
What will be an ideal response?
(N) (N) (N) (N) (N) (N) (D)
Paying cash to improve the quality of a machine decreases one asset (cash) and increases another asset (equipment), resulting in no net effect on total assets. It is reported as a cash outflow for investing activities on the statement of cash flows.
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