Determine the Effect of the Following Transactions on the Financial

Essay

Determine the effect of the following transactions on the financial statements components identified.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 sold inventory for an amount greater than its cost.
Gross profit _____
Current assets _____
Stockholders' equity _____
Transaction 2: Advertising expense was recorded but has yet to be paid for.
Net income _____
Gross Profit _____
Stockholders' equity _____