Cathy Company operates a cleaning service. The grid below is a list of possible effects on the Income Statement and the Balance Sheet. The code is: + increase; decrease; NE = no effect. Revenue Expense Net Income Assets Liabilities Equity NE +600 -600 -600 NE -600 11. NE +700 -700 NE +700 -700 NE NE NE -600 -600 NE IV. NE +500 -500 -500 NE -500 V. NE +500 -500 NE +500 -500 Match the effect that the transaction below would have on Cathy Company's Income Statement and Balance Sheet. Choose (I), (II), (III), (IV), or (V) from the grid. For example, if the transaction were "Paid $600 due on accounts payable," the correct answer would be (III) because there is no effect on revenue, expense, and net income; a $600 decrease in assets and liabilities; and no effect on equity. Transaction: The Company recorded one-year of depreciation on their vacuum cleaners. The vacuum cleaners had an original cost of $3,000, an estimated useful life of five years, and an estimated salvage (residual) value of $500. The Company uses the straight-line depreciation method. Cathy Company had the following transactions during 2021: The company was started when it received $38,000 cash from the owners who purchased stock. The company purchased equipment on January 1 that cost $20,000 cash. The equipment had a three-year useful life and a $2,000 salvage value. Cathy Company uses straight-line depreciation, Services provided for cash were $14,000. . . $3,200 of supplies were purchased on account. Services provided on account were $19,000. On November 1, the company paid cash of $7,200 in advance for six-months' rent, beginning immediately. Cash collections of accounts receivable amounted to $7,000. . $1,000 of the accounts payable were paid. Supplies on hand as of December 31 amounted to $1,200. A $600 cash dividend was declared and paid to the owners. The amount of prepaid rent reported on the balance sheet at December 31, 2021 would be: $2,400 $6,000 $4,800 $4,000 $7,200