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.

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.)

a. NGS repurchased and canceled 1,000 common shares for $10.40 a share

b. NGS issued 1,000 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 on December 20, 2014

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?

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.)

Transaction Balance Sheet Liabilities Shareholder's Equity Assets Transaction ROE