(Learning Objectives 3, 4: Using the accounting equation; evaluating business operations) Nelson, Inc.’s comparative balance sheet at January 31, 20X7, and 20X6, reports

(in millions):

❙ Requirements Three situations about Nelson’s issuance of shares and payment of dividends during the year ended January 31, 20X7, follow. For each situation, use the accounting equation and the statement of changes in equity to compute the amount of Nelson’s net income or net loss during the year ended January 31, 20X7.

1 Nelson issued $11 million of shares and paid no dividends.

2 Nelson issued no shares but paid dividends of $11 million.

3 Nelson issued $55 million of shares and paid dividends of $32 million.