Indicate How Each Event Affects the Horizontal Financial Statements Model

Essay

Indicate how each event affects the horizontal financial statements model. Use the following letters to record your answer in the box shown below each element. If an event increases one account and decreases another account equally within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter amounts.
Increase = I Decrease = D Not Affected = NA
Stan's Surf Shack purchased 5 surfboards for $200 each. Later it purchased 2 more surfboards for $250 each. Stan's uses the perpetual inventory system. Assume that 6 surfboards were sold during the period for $350 cash each.
How would the sale of the six surfboards affect the financial statements if Stan's Surf Shack uses the LIFO inventory cost flow method? Assume the surfboards were sold to customers for more than their original cost.