Question: Using the following key, indicate how the following transactions affect the accounting equation: A. Increase Assets and Increase SHE B. Increase Assets and Increase Liabilities

Using the following key, indicate how the following transactions affect the accounting equation:

A. Increase Assets and Increase SHE

B. Increase Assets and Increase Liabilities

C. Decrease Assets and Decrease Liabilities

D. Increase in Liabilities and Decrease in SHE

E. Decrease in Liabilities and Increase in SHE

F. No effect on the accounting equation

Scenario 1: Record cash collected for services to be performed at a later date

Scenario 2: Record monthly credit sales

Question 2. Tome Cole was reviewing his business activities at the end of the year (2017) and was analyzing his financial statements. At the beginning of the year his assets were $500,000 and liabilities were $150,000. During 2017 he made an additional investment into the company of $50,000. The net income for the year was $220,000 and dividends of $120,000 were paid. Determine the ending Stockholder's Equity as of December 31, 2017.

A. $100,000

B. $450,000

C. $620,000

D. $500,000

E. $800,000

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