Leslie Printing has net income of $26,310 for the year.At the beginning of the year, the firm had common stock of $55,000, paid-in surplus of $11,200, and retained earnings of $48,420.At the end of the year, the firm had total equity of $142,430.The firm paid dividends of $32,500.What is the amount of the net new equity raised during the year?
A)$34,000
B)$42,500
C)$25,000
D)$21,500
E)$0

Question

Quizplus · Accepted Answer

The net new equity raised is calculated as the change in total equity minus retained earnings and dividends. The change in total equity is $142,430 - ($55,000 + $11,200 + $48,420) = $27,810. Retained earnings increased by net income minus dividends: $26,310 - $32,500 = -$6,190. Therefore, net new equity raised is $27,810 - (-$6,190) = $34,000.

Leslie Printing Has Net Income of $26,310 for the Year