Sanborn Company has outstanding 40,000 shares of $5 par common stock which had been issued at $30 per share. Sanborn then entered into the following transactions.

1. Purchased 5,000 treasury shares at $45 per share.

2. Resold 500 of the treasury shares at $40 per share.

3. Resold 2,000 of the treasury shares at $49 per share.

Use the following code to indicate the effect each of the three transactions has on the financial statement categories listed in the table below, assuming Sanborn Company uses the cost method: I = Increase; D = Decrease; NE = Noeffect.

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# 1 2 3 Assets Liabilities Stockholders' Equity Paid-in Capital Retained Earnings Net Income