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Beauty Products, Incorporated, is a leading manufacturer and marketer of beauty products and related merchandise. The company sells its

products in $79$ countries through a combination of direct selling and use of individual sales representatives. Presented here is an earlier year's

income statement $($dollars in millions$).$

Beauty's beginning and ending total assets were $$3,021\mathrm{.}1$ and $$3,097\mathrm{.}3,$ respectively.

Required:

Listed below are hypothetical additional transactions. Assuming that they also occurred during the fiscal year, complete the following

tabulation, indicating the sign of the effect of each additional transaction $(+$ for increase and $-$ for decrease$).$ Consider each item

independently and ignore taxes. $($Hint: Construct the journal entry for each transaction before evaluating its effect.$)$

a$.$ Recorded and received additional interest income of $$5.$

b$.$ Purchased $$91$ of additional inventory on open account.

c$.$ Recorded and paid additional advertising expense of $$27.$

d$.$ Issued additional shares of common stock for $$51$ cash.

Assume that next period, Beauty does not pay any dividends, does not issue or retire stock, and earns $20$ percent more than during the

current period. If total assets increase by $5$ percent, will Beauty's ROA next period be higher, lower, or the same as in the current period?

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