Answer: The amount of dividend paid during the month is $7,000.
Explanation: You need to prepare a simple movement schedule (an extract from the statement of changes in equity) to solve this question as follows:
Arcade Fire Enterprises
Stockholders' equity, begining of the month $35,000
Net income (addition) 9,000
Dividend paid (XXXX)
Stockholders' equity, end of the month 37,000
To get XXXX, you need to make it the subject of the formula:
$35,000 + $9,000 - XXXX = $37,000
$44,000 - XXXX = $37,000
XXXX = $44,000 - $37,000
XXXX = $7,000
Note that dividends are always paid out of stockholders' equity.
