At October 1, Arcade Fire Enterprises reported stockholders' equity of $70,000.During October, no stock was issued and the company earned net income of $18,000.If stockholders' equity at October 31 totals $78,000, what amount of dividends were paid during the month?

Question

Quizplus · Accepted Answer

Stockholders' equity increased by $8,000 ($78,000 - $70,000) due to the net income of $18,000. Therefore, dividends of $10,000 must have been paid to reduce the increase in stockholders' equity to $8,000.

At October 1, Arcade Fire Enterprises Reported Stockholders' Equity of $70,000.During