Barnes & Noble, Inc., revolutionized bookselling by making its stores public spaces and community institutions where customers may browse, find a book, relax over a cup of coffee, talk with authors, and join discussion groups. Today it is fighting increasing competition not only from traditional sources but also from on-line booksellers. Presented here is a recent income statement (in millions).

Its beginning and ending stockholders" equity was $400 and $446, respectively.
Required: 1. Listed here are hypothetical additional transactions. Assuming that they had also occurred during the fiscal year, complete the following tabulation, indicating the sign of the effect of each additional transaction ( + for increase, - for decrease, and NE for no effect). Consider each item independently and ignore taxes.

a. Recorded and received additional interest income of $4.

b. Purchased $25 of additional inventory on open account.

c. Recorded and paid additional advertising expense of $9.

d. Additional shares of common stock are issued for $50 cash. 2. Assume that next period. Barnes & Noble does not pay any dividends, does not issue or retire stock, and earns 20 percent more than during the current period. Will Barnes & Noble's ROE next period be higher, lower, or the same as in the current period? Why?

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Net sales Costs and expenses Cost of sales Selling, general and administrative Depreciation and amortization Preopening expenses Operating income (loss) Interest and other income (expenses), net Income (loss) before provision (benefit) for income taxes Provision (benefit) for income taxes Net income (loss) $2,448 1,785 466 60 18 119 (38) 81 30 $ 51