During 2014, Yahoo! Inc. entered into the transactions listed below.
a. On a separate sheet of paper, complete the following chart to show the effect of these transactions on the accounting equation and compute the net effect (dollars in millions).
Transaction                                                                                              Assets = Liabilities + Shareholders’ Equity
1. Recognized service revenues of $4,618 in exchange for accounts receivable.
2. Paid $142 for advertising.
3. Issued common stock for $24.
4. Purchased short term investments for $7,890.
Net effect
b. Which of these transactions would be reflected on the income statement? Which of these transactions would be reflected on the statement of cash flows?