What happens to the balance sheet when a $100 equity investment is made from the government?

When a $100 equity investment is made from the government, assets increase by $100. This is because the investment represents cash or another form of asset that would be received as a result of the government’s contribution.

Specifically, when the government invests equity into a company, it typically comes in the form of cash or other assets entering the company's balance sheet. This directly boosts the asset side, reflecting the increase in resources available to the company. At the same time, this equity investment will also reflect on the shareholders' equity section because it signifies that the government holds a stake in the company.

Thus, while the investment does affect both sides of the balance sheet, the most immediate and logical effect to note is the increase in assets by the amount of the investment. This helps the company in financing its operations or investing in new projects, contributing positively to its overall financial health.