25 Dec Identify effect of product versus general, selling
Identify effect of product versus general, selling, and administrative costs on financial statementsRequiredMilby Industries recognized the annual cost of depreciation on December 31, 2010. Using the following horizontal financial statements model, indicate how this event affected the company’s financial statements under the following two assumptions: (1) the depreciation was on office furniture and (2) the depreciation was on manufacturing equipment. Indicate whether the event increases (I), decreases (D), or has no affect (NA) on each element of the financial statements. Also, in the Cash column, indicate whether the cash flow is for operating activities (OA), investing activities (IA), or financing activities (FA). (Note: Show accumulated depreciation as a decrease in the book value of the appropriate asset account.) Assets Equity Event No. Cash + Inventory + Manuf. Equip. + Office Furn. = Com. Stk. + Ret. Earn. Rev. Exp. = Net Inc. Cash Flow 1. 2.