Question

Begin by reviewing the labels for the change in​ stockholders' equity and then enter the amounts for each situation.

Three situations about Timmy Company's issuance of stock and declaration and payment of dividends during the year ended January 31, 2017. follow.
Requirements.
Begin by reviewing the labels for the change in stockholders' equity and then enter the amounts for each situation.
Situation A Situation B Situation C
Total stockholders' equity, January 31, 2016
Add: Issuance of stock
Net income
Less: Dividends declared
Net loss
Total stockholders' equity, January 31, 2017
For each situation, use the accounting equation and the statement of retained earnings to compute the amount of Timmy's net income or net loss during the year ended January 31 2017.
1. Timmy issued $13 million of stock and declared no dividends.
2. Timmy issued no stock but declared dividends of $17 million.
3. Timmy issued $20 million of stock and declared dividends of $27 million.

Answer 1

Note: The missing part of the question is

" 2017'million 2016'million

Total asset 77 50

Total liability 18 13"

Solution:

Stockholders Equity at year end

2017 2016

Assets 77 50

Less: liabilities -18 -13

Equity at end 59 37

Note: Situation 1, 2 and 3 is the same as question 1, 2 and 3

Situation 1 Situation 2 Situation 3

$'million $'million $'million

Total stockholders Equity 37 37 37

Jan 31 ,2016

Add: Issuance of stock 13 0 20

Less: dividend declared 0 -17 -27

Net income 9 39 29

Total stockholders Equity 59 59 59

January 31,2017