Chapter 1, Problem 1.22AE

LO 3, 4

(Learning Objectives 3, 4: Apply the accounting equation; evaluate business operations) Collinswood Company’s comparative balance sheet at January 31, 2019, and 2018, reports the following (in millions)

	2019	2018
Total assets	$77	$47
Total liabilities	25	19

Requirements

The following are three situations related to Collinswood Company’s issuance of stock and declaration and payment of dividends during the year ended January 31, 2019. For each situation, use the accounting equation and what you know from the chapter about stockholders’ equity, common stock, and retained earnings to calculate the amount of Collinswood’s net income or net loss during the year ended January 31, 2019.

1. 1. Collinswood issued $11 million of stock and declared no dividends.
2. 2. Collinswood issued no stock but declared dividends of $20 million.
3. 3. Collinswood issued $15 million of stock and declared dividends of $75 million.