Nicole has been financing Nicoles Getaway Spa (NGS) using equity financing Currently, NGS has authorized 100,000, $0 34 preferred shares and 200,000 common shares Outstanding shares include 54,000 preferred shares and 44,000 common shares Recently the following transactions have taken place a NGS repurchased and cancelled 1,000 common shares for $10 40 a share b NGS issued 1,000 preferred shares for $12 40 a share c On November 12, 2014, the board of directors declared a cash dividend on each outstanding preferred share d The dividend was paid December 20, 2014 Required 1 Prepare the journal entries needed for each of the transactions (If no entry is required for a transaction event, select No journal entry required in the first account field ) 2 If you were a common shareholder concerned about your voting rights, would you prefer Nicole to issue additional common shares or additional preferred shares a Additional preferred shares b Additional common shares 3 Describe the overall effect of each transaction on the assets, liabilities, and shareholders' equity of the company (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign ) 4 How would each transaction affect the ROE ratio (Use for increase, for decrease, NE for no effect ) Thank You Journal entry worksheet NGS repurchased and cancelled 1,000 common shares for $10 40 a share Note Enter debits before credits Event General Journal Debit Credit a Record entry Clear entry View general journal Journal entry worksheet NGS issued 1,000 preferred shares for $12 40 a share Note Enter debits before credits Event General Journal Debit Credit b Record entry Clear entry View general journal Journal entry worksheet On November 12, 2014, the board of directors declared a cash dividend on each outstanding preferred share Note Enter debits before credits Event General Journal Debit Credit C Record entry Clear entry View general journal Journal entry worksheet The dividend was paid December 20, 2014 Note Enter debits before credits General Journal Debit Credit Event d Record entry Clear entry View general journal Transaction Balance Sheet Liabilities Shareholder's Equity Assets a b C d Transaction ROE a b C d

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Nicole has been financing Nicoles Getaway Spa (NGS) using equity financing. Currently, NGS has authorized 100,000, $0.34 preferred shares and 200,000 common shares. Outstanding shares

Nicole has been financing Nicoles Getaway Spa (NGS) using equity financing. Currently, NGS has authorized 100,000, $0.34 preferred shares and 200,000 common shares. Outstanding shares include 54,000 preferred shares and 44,000 common shares.

Recently the following transactions have taken place:

a.	NGS repurchased and cancelled 1,000 common shares for $10.40 a share.
b.	NGS issued 1,000 preferred shares for $12.40 a share.
c.	On November 12, 2014, the board of directors declared a cash dividend on each outstanding preferred share.
d.	The dividend was paid December 20, 2014.

Required:

1.	Prepare the journal entries needed for each of the transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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If you were a common shareholder concerned about your voting rights, would you prefer Nicole to issue additional common shares or additional preferred shares?

a.	Additional preferred shares
b.	Additional common shares

3.	Describe the overall effect of each transaction on the assets, liabilities, and shareholders' equity of the company. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.)

image text in transcribed

4.	How would each transaction affect the ROE ratio? (Use + for increase, for decrease, NE for no effect.)

image text in transcribed

Thank You!

Journal entry worksheet NGS repurchased and cancelled 1,000 common shares for $10.40 a share. Note: Enter debits before credits. Event General Journal Debit Credit a. Record entry Clear entry View general journal Journal entry worksheet NGS issued 1,000 preferred shares for $12.40 a share. Note: Enter debits before credits. Event General Journal Debit Credit b. Record entry Clear entry View general journal Journal entry worksheet On November 12, 2014, the board of directors declared a cash dividend on each outstanding preferred share. Note: Enter debits before credits. Event General Journal Debit Credit C. Record entry Clear entry View general journal Journal entry worksheet The dividend was paid December 20, 2014. Note: Enter debits before credits. General Journal Debit Credit Event d. Record entry Clear entry View general journal Transaction Balance Sheet Liabilities Shareholder's Equity Assets a b. C. d. Transaction ROE a. b. C. d