Driscoll Industries recognized the annual cost of depreciation on its December 31, Year 1, financial statements.

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 effect (NA) on each element of the financial statements. In the financial statements model the Book Value of the Manufacturing Equipment account is abbreviated as B.V. Manuf. Equip. and the Book Value of the Office Furniture account is abbreviated as B.V. Office Furn.

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Balance Sheet Income Statement Assets Stk. Equity Statement of B.V. B.V. Cash Flows Manuf. Office Com. Ret. Event No. Cash + Inventory + Equip. + Furn. Stk. + Earn. Rev. Еxp. Net Inc. %3D 1. 2.