During 2014, Abercrombie & Fitch 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. Repaid $195,750 of long-term debt.
2. Paid cash dividends of $57,362.
3. Repurchased common stock for $285,038.
Net effect
b. Compare and discuss how Transactions 2 and 3 affected the basic accounting equation.