1. Determine the effect of the following transactions on the identified financial statement components and ratios. (5 points)

Code your answers as follows:

A: If the transaction results in an increase in the financial statement component or ratio.

B: If the transaction results in a decrease in the financial statement component or ratio.

C: If the transaction does not affect the financial statement component or ratio.

Transaction 1: A company accrued interest expense at year-end.

Net income _____

Assets _____

Stockholders' equity _____

Total asset turnover ratio _____

Transaction 2: A company declared and paid cash dividends to stockholders.

Net income _____

Assets _____

Stockholders' equity _____

Return on assets ratio _____