medium · Principles of Finance

Which of the following best describes the immediate impact on the three financial statements?

1. Cash from Financing Activities decreases by $50 million, Cash on the Balance Sheet decreases by $50 million, and Treasury Stock (a contra-equity account) increases by $50 million.
2. Cash from Operating Activities decreases by $50 million, and long-term assets decrease by $50 million.
3. Net Income on the Income Statement decreases by $50 million, reducing Retained Earnings on the Balance Sheet.
4. Cash from Financing Activities increases by $50 million, and Common Stock on the Balance Sheet increases by $50 million.

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