At October 1, Smithson Enterprises reported equity of $70,000.During October, capital shares of $4,000 were issued and the company earned net income of $12,000.If equity at October 31 totals $80,000, what amount of dividends were paid during the month?

Question

Quizplus · Accepted Answer

The change in equity can be calculated as: Initial equity ($70,000) + Capital shares issued ($4,000) + Net income ($12,000) - Dividends = Final equity ($80,000). Solving for dividends gives $6,000.

At October 1, Smithson Enterprises Reported Equity of $70,000