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 87

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 XYZ Company purchased the ABC Company for $520,000 cash. ABC's assets had been appraised at $410,000. ABC had liabilities of $40,000, which XYZ assumed. How would the purchase of ABC affect XYZ's financial statements? $\begin{array}{|l|l|l|l|l|l|}\text { Assets Liabilities } & \text { Equity } & \text { Revenues } & \text { Expenses } & \begin{array}{c}\text { Net } \\\text { Income }\end{array} & \begin{array}{c}\text { Cash } \\\text { Flow }\end{array}\\\hline&&&\end{array}$

---

Definitions:

Monthly Calendar Page

A calendar format or layout displaying an entire month on a single page or screen, commonly used to record or plan events.

Natural Phrase

A way of input or query that allows the use of everyday language, enhancing the interaction between humans and computers.

Normal Conversation

An informal, spontaneous dialogue between individuals without specific agenda or formal structure, typically involving everyday topics.

Navigation Pane

A user interface component that displays the main areas or features of an application or website, typically as a sidebar.