Indicate How Each Event Affects the Elements of Financial Statements $$\text { Increase } = \mathrm { I } \quad \text { Decrease } = \mathrm { D } \quad \text { No Effect } = \mathrm { N }$$

question 52

Short Answer

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. $$\text { Increase } = \mathrm { I } \quad \text { Decrease } = \mathrm { D } \quad \text { No Effect } = \mathrm { N }$$
The Borger Company purchased an asset for $20,000 on January 1, 2007. The asset had a zero salvage value and an 8-year estimated useful life. On January 1, 2014 the company spent $2,000 cash on routine repair and maintenance. What effect will recording the 2014 expenditure have on the company's financial statements for the year? $\begin{array}{|l|l|l|l|l|l|}\text { Assets Liabilities } & \text { Equity } & \text { Revenues } & \text { Expenses } & \begin{array}{c}\text { Net } \\\text { Income }\end{array} & \begin{array}{c}\text { Cash } \\\text { Flow }\end{array}\\\hline&&&\end{array}$

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Definitions:

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a certain period.

Two-part Tariff

A pricing strategy that includes a fixed fee plus a variable fee based on consumption or usage level.

Marginal Cost

The financial outlay required to produce a further unit of a product or service.

Demand

Demand refers to the quantity of a product or service that consumers are willing and able to purchase at various prices during a given time period.