Questions: Additional common stock of 3,000 was issued, and dividends of 7,000 were paid during the current year.

Transcript text: Additional common stock of $\$ 3,000$ was issued, and dividends of $\$ 7,000$ were paid during the current year.

Solution

Solution Steps

To solve this problem, we need to calculate the net change in equity due to the issuance of additional common stock and the payment of dividends. The net change in equity can be found by adding the amount of common stock issued and subtracting the dividends paid.

Step 1: Identify the Given Values

We are given the following values:

Additional common stock issued: $\$3000$
Dividends paid: $\$7000$

Step 2: Calculate the Net Change in Equity

The net change in equity can be calculated using the formula: \[ \text{Net Change in Equity} = \text{Additional Common Stock} - \text{Dividends Paid} \]

Substituting the given values: \[ \text{Net Change in Equity} = 3000 - 7000 = -4000 \]