Logan Company's comparative Balance Sheet at December 31, 2021 reports the following (in millions): 2021 2020 Total Assets 85 60 Total Liabilities 55 45 During 2021, Logan Company earned net income in the amount of $14 million and issued $8 million of common stock. Calculate the amount of dividends that Logan Company-should report in its 2021 Statement of Stockholders' Equity? $5 million O $3 million O $2 million $7 million None of the above.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Logan Company's comparative Balance Sheet at December 31, 2021 reports the
nts
following (in millions):
2021
2020
Total Assets
85
60
Total Liabilities
55
45
During 2021, Logan Company earned net income in the amount of $14 million and
issued $8 million of common stock. Calculate the amount of dividends that Logan
Company-should report in its 2021 Statement of Stockholders' Equity?
$5 million
O $3 million
$2 million
$7 million
None of the above.
Transcribed Image Text:Logan Company's comparative Balance Sheet at December 31, 2021 reports the nts following (in millions): 2021 2020 Total Assets 85 60 Total Liabilities 55 45 During 2021, Logan Company earned net income in the amount of $14 million and issued $8 million of common stock. Calculate the amount of dividends that Logan Company-should report in its 2021 Statement of Stockholders' Equity? $5 million O $3 million $2 million $7 million None of the above.
Expert Solution
Step 1

The above Requirement asked can be completed using the Accounting equation.

>Accounting equation states that Total Assets = Total Liabilities + Total equity.

>This equation must hold good after each transaction as part of double entry accounting system.

>It is because of this that total debits are always equal to total credits.

 

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