Wyatt Company Paid $57,000 in January of Year 2 for Salaries

Wyatt Company paid $57,000 in January of Year 2 for salaries that had been earned by employees in December of Year 1. Indicate whether each of the following statements about financial statement effects of the January of Year 2 event is true or false.The income statement for Year 2 is not affected because the salaries expense had been recognized at the end of December in Year 1.Cash flows from operating activities decreased on the Year 2 statement of cash flows.Payment of the salaries in Year 2 increased a liability.The Year 2 statement of changes in stockholders' equity would not be affected because the salaries expense had been recognized at the end of December in Year 1.Both assets and stockholders' equity decreased in Year 2 as a result of this transaction.