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3 March, 09:26

At October 1, Arcade Fire Enterprises reported stockholders' equity of $36,000. During October, no stock was issued and the company posted a net income of $4,000. If stockholders' equity at October 31 totals $32,000, what amount of dividends were paid during the month? A. $8,000 B. $2,000 C. $0 D. $4,000

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  1. 3 March, 13:04
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    A. $8,000

    Explanation:

    Stockholders Equity Includes the Add-in-capital par value, Add-in-capital excess value of Common and Preferred, Net income accumulated value and dividends.

    Ending Stockholders Equity = Beginning Stockholders Equity + Income for the period - Dividend paid During the period

    $32,000 = $36,000 + $4,000 - Dividend paid During the period

    $32,000 = $40,000 - Dividend paid During the period

    Dividend paid During the period = $40,000 - $32,000

    Dividend paid During the period = $8,000
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