At October 1, Smithson Enterprises reported equity of $70,000.During October, capital shares of $10,000 were issued and the company posted a net loss of $6,000.If equity at October 31 totals $70,000, what amount of dividends were paid during the month?

Question

Quizplus · Accepted Answer

The equity increased by $10,000 from capital shares and decreased by $6,000 due to the net loss. To maintain the equity at $70,000, dividends of $4,000 must have been paid.

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