Tesla, Inc. is an American automaker, energy storage company, and solar panel ma
ID: 2561601 • Letter: T
Question
Tesla, Inc. is an American automaker, energy storage company, and solar panel manufacturer based in Palo Alto, California. Currently, the company produces two models of plug-in electric vehicles. – Model S (luxury sedan) and Model X (crossover SUV). Tesla's ultimate goal is to make eclectic vehicles affordable to everyone, this goal will be realized next year when it releases its newest vehicle, the Model 3. Model 3 has a base price of US$35,000, before any governmental rebates. It will be shipped to buyers in July 2017. The main Tesla’s automobile manufacturing plant is in Fremont, California. YES, Tesla Inc. mainly, produces in USA and after new giga-factory is complete, 95 percent of the parts contained in Tesla vehicles will be made in the United States (something to be proud of).
To help to finance the Model 3 production, Tesla issued common stock and convertible bonds in March 2017 to raise approximately $1.37 billion in cash. Tesla is also using some of the common stock and bond proceeds to grow its recently acquired solar business (SolarCity Inc.) and to supplement other parts of its business. From Tesla’s Inc. 10-Q (Quarterly fillings with SEC):
“In March 2017, we completed a public offering of our common stock and issued a total of 1,536,259 shares for total cash proceeds of $399.6 million (including 95,420 shares purchased by our Chief Executive Officer for approximately $25.0 million), net of underwriting discounts and offering costs.”
In March 2017, we issued $977.5 million in aggregate principal of 2.375% convertible senior notes due in March 2022 (“2022 Notes”) in a public offering. The net proceeds from the issuance, after deducting transaction costs, were $965.9 million.”
Common Stock par value: 0.001.
How was accounting equation impacted by the stock issuance?
A. Assets increased, liabilities increased, equity increased. B. Assets increased, liabilities unaffected, equity increased. C. Assets increased, liabilities increased, equity unaffected. D. Assets decreased, liabilities unaffected, equity increasedExplanation / Answer
The answer is B.Assets Increased, Liabiliies Unafected and Equity Increased.
When we issue stock equity increases and when cash comes assets increases but there is no effect on liability
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