Nicole has been financing Nicole's Getaway Spa (NGS) using equity financing. Currently NGS has authorized 100,00 par preferred shares and 200,000 $2 par common shares. Outstanding shares include 59,000 preferred shares an 9,000 common shares. Recently the following transactions have taken place. NGS issues 1,450 preferred shares for $12 a share. NGS repurchases 1,450 common shares for $11 a share. On November 12, the board of directors declares a $0.50 cash dividend on each outstanding preferred share. The dividend is paid December 20.
Nicole has been financing Nicole's Getaway Spa (NGS) using equity financing. Currently NGS has authorized 100,00 par preferred shares and 200,000 $2 par common shares. Outstanding shares include 59,000 preferred shares an 9,000 common shares. Recently the following transactions have taken place. NGS issues 1,450 preferred shares for $12 a share. NGS repurchases 1,450 common shares for $11 a share. On November 12, the board of directors declares a $0.50 cash dividend on each outstanding preferred share. The dividend is paid December 20.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Vikarmbhai
![a. NGS issues 1,450 preferred shares for $12 a share.
b. NGS repurchases 1,450 common shares for $11 a share.
c. On November 12, the board of directors declares a $0.50 cash dividend on each outstanding preferred share.
d. The dividend is paid December 20.
3. Show the overall effect of each transaction on the assets, liabilities, and shareholders' equity of the company. (Use + for increase, -
for decrease, and NE for no effect.)
[The following information applies to the questions displayed below.]
Nicole has been financing Nicole's Getaway Spa (NGS) using equity financing. Currently NGS has authorized 100,000 no-
par preferred shares and 200,000 $2 par common shares. Outstanding shares include 59,000 preferred shares and
49,000 common shares.
Recently the following transactions have taken place.
Transaction
a.
b.
C.
d.
+
NE
Assets
Answer is complete but not entirely correct.
Balance Sheet
17,400
15,950
(30,225)
Liabilities
NE✔
NE
+
Stockholders'
Equity
30,225
(30,225) NE
17,400
15,950
(30,225) X](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F66ec6b55-400a-438d-b302-bfc00a82fdd6%2F3b162e86-122f-4861-af23-362f0ba80508%2Fr2uhkp6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:a. NGS issues 1,450 preferred shares for $12 a share.
b. NGS repurchases 1,450 common shares for $11 a share.
c. On November 12, the board of directors declares a $0.50 cash dividend on each outstanding preferred share.
d. The dividend is paid December 20.
3. Show the overall effect of each transaction on the assets, liabilities, and shareholders' equity of the company. (Use + for increase, -
for decrease, and NE for no effect.)
[The following information applies to the questions displayed below.]
Nicole has been financing Nicole's Getaway Spa (NGS) using equity financing. Currently NGS has authorized 100,000 no-
par preferred shares and 200,000 $2 par common shares. Outstanding shares include 59,000 preferred shares and
49,000 common shares.
Recently the following transactions have taken place.
Transaction
a.
b.
C.
d.
+
NE
Assets
Answer is complete but not entirely correct.
Balance Sheet
17,400
15,950
(30,225)
Liabilities
NE✔
NE
+
Stockholders'
Equity
30,225
(30,225) NE
17,400
15,950
(30,225) X
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