Modeling a Growth Equity Raise

[dp013]

I believe the answer is simple, but could someone please confirm? I’m struggling with the fees portion.
Scenario:
I’m modeling a $20M growth equity raise into my model with 10% fees and commissions.
Result:
Cash increases by $18M
Equity increases by $18M
Net Income decreases by $2M

 

[IsThereAny]

Equity would increase by $20M unless I am reading it wrong. The journal would be:
D C
Cash $18M
Commissions & Fees (expense) $2M
Equity $20M
Result:
Increase in Cash of $18M
Increase in Equity of $20M
Decrease in Net Income of $2M

 

[dp013]

IsThereAny wrote:
Equity would increase by $20M unless I am reading it wrong. The journal would be:
D C
Cash $18M
Commissions & Fees (expense) $2M
Equity $20M
Result:
Increase in Cash of $18M
Increase in Equity of $20M
Decrease in Net Income of $2M

Assets don’t equal Liabilities + Equity though. Wouldn’t the $2M decrease by seen in retained earnings and flow into Equity?
So, Cash increases by $18M and Equity increases by $18M ($20M from the capital raise minus the $2M that flows through from retained earnings), correct??

 

[IsThereAny]

dp013 wrote:

IsThereAny wrote:
Equity would increase by $20M unless I am reading it wrong. The journal would be:
D C
Cash $18M
Commissions & Fees (expense) $2M
Equity $20M
Result:
Increase in Cash of $18M
Increase in Equity of $20M
Decrease in Net Income of $2M

Assets don’t equal Liabilities + Equity though. Wouldn’t the $2M decrease by seen in retained earnings and flow into Equity?
So, Cash increases by $18M and Equity increases by $18M ($20M from the capital raise minus the $2M that flows through from retained earnings), correct??

They do equal:
Cash (Asset) - Increases by $18M
Equity - Increases by $18M (+$20M Equity - $2M Net Income)