E-F:1-40 Using the accounting equation for transaction analysis and calculating return on assets Vivian's Online Video currently has a return on assets of 10%. Indicate the effects of the following business transactions on the Vivian's Online Video return on assets. Consider each transaction independently of the others. Identify if the return on assets increases, decreases, or does not change. Explain your answer. Transaction (a) is answered as a guide. a. Purchased office furniture on account, $300. Answer: Decreases. The increase in assets office furniture) increases the denominator in the equation and therefore decreases the ratio. b. Earned video rental revenue on account, $2,800. c. Paid $100 cash to purchase office supplies. d. Received cash of $10,000 from owner in exchange for capital. e. Paid cash on account, $100. f. Received cash on account, $400. (2) Increase in assets increases the numerator, causing an increase in the ratio Increase in assets is offset by increase in income; therefore, no change in the ratio Increase in income increases the denominator, causing a decrease in the ratio Increase in income (numerator) and increase in assets (denominator) results in a net decrease in the ratio Increase in income (numerator) and increase in assets (denominator) results in a net increase in the ratio Increase in liabilities increases the denominator, causing a decrease in the ratio Increase in liabilities increases the numerator, causing an increase in the ratio No effect on income statement accounts; therefore no change in the ROA