Answer: $2240
Explanation:
Preferred shareholders have priority over the income of a company as they're paid dividends before the common shareholders. The common stockholders are the ones that are paid last after the preferred shareholders and creditors have all been paid.
The dividend on the preferred shares will be calculated as:
= 2700 × 10 × 6%
= 2700 × 10 × 0.06
= 1620
Tge dividend in arrears fir the first year will be calculated as:
= 1620 - 1000
= 620
Dividend for the second year will be:
= 1620
Dividend that'll be paid to preferred shareholders will be:
= $620 + $1620
= $2240
Why would an analyst include among other things, airplane parts, legal services and software, in an analysis of international economic trade? a. to determine the merchandise trade balance.b. to determine the balance of trade in services.c. to determine the current account balance.d. to determine the international flow of income.
Answer: c. to determine the current account balance
Explanation:
International trade is simply defined as the exchange of goods and services which takes place between countries. It should be noted that international trade gives countries and consumers and the exposure to the goods and services that are not available in their own countries.
An analyst would include airplane parts, legal services and software, in an analysis of international economic trade so as to determine the current account balance.
Allo Foundation, a tax-exempt organization, invested $200,000 in cost-saving equipment. The equipment has a five-year useful life with no salvage value. Allo estimates that the annual cash savings from this project will amount to $65,000. On investments of this type, Allo's required rate of return is 12%.The net present value of the project is closest to: Select one: a. $34,300 b. $36,400 c. $90,000 d. $125,000
Answer:
Net Present Value = $ 34,310.45
Explanation:
The Net present Value (NPV ) is the difference between the present value PV of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite.
NPV of an investment
NPV = PV of Cash inflows - PV of cash outflow
The cash inflow is an annuity.
PV of annuity= A× 1 -(1+r)^(-n)/r
A- Annual cash flow ,- 65,000 r - discount rate - 12%, number of years- 5
Present Value of cash inflow =65,000 × (1- (1.12)^(-5)/0.12 = 234,310.45
Initial cost = 200,000
Net Present Value = - 234,310.45 -200,000 = 34,310.45
Net Present Value = $ 34,310.45
You are considering the purchase of a new machine to help produce a new product line being introduced. The machine is expected to have a setup time of 10 minutes per batch and a processing time of 2 minutes per part. You plan to have batch sizes of 50 parts. The plant operates 8 hours per day.
A. (5 points) What is the capacity of the machine in batches per day?
B. (5 points) What is the capacity of the machine in parts per day?
C. (5 points) How many batches per daycan you run through the machine if you decide to operate the machine at a 70% utilization rate?
D. (5 points) How many parts per daycan you process through the machine if you decide to operate the machine at an 85% utilization rate?
Answer:
A. 4.3 batches
B. 215 parts
C. 3 batches
D. 184 parts
Explanation:
Please find explanation attached
For spring break, Melanie will either stay home or go to Daytona Beach. At home, Melanie pays $10 per day for food and earns $90 a day at her job. At Daytona Beach, Melanie will stay with friends and so has no lodging cost. She will pay $20 per day for food. In terms of dollars, Melanie's opportunity cost per day of going to Daytona Beach is how much
Answer:
$100
Explanation:
Opportunity cost or implicit is the cost of the option forgone when one alternative is chosen over other alternatives
If Melanie goes to the beach, she would not be able to stay at home. Staying at home is the opportunity cost of going to the beach.
The total opportunity cost of going to the beach = $10 + $90 = $100
Which expression is another way of saying "marginal cost"?A) total costB) additional costC) average costD) scarcity
Answer:
Explanation:
additional cost i believe. sorry if i'm wrong
An example of a capital budgeting decision is deciding: Group of answer choices how many shares of stock to issue whether or not to purchase a new machine for the production line. how to refinance a debt issue that is maturing. how much inventory to keep on hand. how much money should be kept in the checking account.
Answer:
whether or not to purchase a new machine for the production line
Explanation:
Capital budgeting decision is the process by which a company sets aside money for the purchase of capital assets such as new machinery, new plants, research and development, and new product.
Capital budgeting is considered to be both a financial decision and an investment decision. Apart from cost incurred by making a purchase, the company considers the future cash flows the capital asset will generate.
Purchasing a new machine for the production line is a capital budgeting decision
Juniper Company uses a perpetual inventory system. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 16, it paid the full amount due. The correct journal entry to record the payment on August 16 is:_________
a) Debit Merchandise Inventory $8,250; credit Cash $8,250.
b) Debit Accounts Payable $8,250; credit Merchandise Inventory $82.50; credit Cash $8,167.50.
c) Debit Accounts Payable $9,750; credit Merchandise Inventory $97.50; credit Cash $9,652.50.
d) Debit Accounts Payable $8,167.50; credit Cash $8,167.50.
Answer:
b) Debit Accounts Payable $8,250; credit Merchandise Inventory $82.50; credit Cash $8,167.50
Explanation:
Preparation of correct journal entry to record the payment on August 16
Based on the information given we were told that the company made a purchased of the amount of $9,750 of merchandise with terms of 1/10 and as well made returned of the amount of $1,500 worth of the merchandise while the full amount due was paid on August 16 which means that the journal entry to record the payment on August 16 will be :
Debit Accounts Payable $8,250
($9,500-$1,500)
Credit Merchandise Inventory $82.50
(1%×$8,250)
Credit Cash $8,167.50
[(100%-1%)×$8,250)]
This and the following three questions are related: Suppose that you are a major airline that has budgeted a price of fuel of 1.3840 USD/gal for fiscal year 2021 and you plan to end up buying 1 million gallons of it. To hedge against possible increases in the price you buy a one-year call option with a strike price of 1.4539 USD/gal for 1 million gallons with a premium of 1 cent/gal. How much would you the total premium of the option be
Answer:
A. 10,000 USD
Explanation:
Total premium will be as given below
= 1 million gallons * 1 cent/gal
= 1,000,000 * (1/100)
= 10,000USD
Note: Options to question is as attached
39. You expect to receive $5,000 in 25 years. How much is it worth today if the discount rate is 5.5%?
Answer:
PV= $1,311.17
Explanation:
Giving the following information:
Future Value (FV)= $5,000
Number of periods (n)= 25 years
Interest rate (i)= 5.5% compounded annually
To calculate the present value (PV), we need to use the following formula:
PV= FV / (1+i)^n
PV= 5,000 / 1.055^25
PV= $1,311.17
On December 31, 2020, Elena and Edgardo would like to give the maximum amount possible to their five married children, their spouses, and their six grandchildren. Under the Federal gift tax annual exclusion, and assuming that Elena and Edgardo elect gift splitting, how much can they give their family (in total) for 2020
Answer:
$480,000
Explanation:
The Federal gift tax annual exclusion is $15,000 per person. Since they are gift splitting, they can give up to $30,000 per person. The limit is imposed by the couple's total lifetime exclusion which is $11.58 million for 2020. This means that you can make gifts to multiple people during your lifetime and if the total gifts do not pass the lifetime exclusion, you will not be taxed for it.
5 children x 2 (their spouses) = 10 people
6 grandchildren
total = 16 people
total annual gifts = 16 x $30,000 = $480,000
At the annual shareholders meeting of the company you work for, the CEO points out that after a record year of cash flow, the company plans to spend significant amounts of that cash in a stock repurchase program. What is one reason the Board of Directors and executive leadership of a company would use its excess cash flow to buy back its own shares?
Answer:
increase their ownership amount of the company
Explanation:
The main reason why shareholders would do this is to increase their ownership amount of the company. Each company only has a certain number of shares available, the entirety of this amount makes up the entire company. The more shares you own, the more of the company you own. Therefore, when there is excess cash flow many shareholders buyback more of their stocks in order to own more of the company, which they think will continue to grow and bring them more profits.
Baker Industries’ net income is $24,000, its interest expense is $6,000, and its tax rate is 25%. Its notes payable equals $24,000, long-term debt equals $75,000, and common equity equals $250,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm’s ROE and ROIC? Do not round intermediate calculations. Round your answers to two decimal places.
Answer:
ROE = 9.6% , ROIC = 8.17%
Explanation:
1) ROE = Net Income / Common Equity
ROE = $24,000 / $250,000
ROE = 0.096
ROE = 9.6%
2) ROIC = [EBIT * (1-tax rate)] / Total Invested capital
EBT = Net income *100 / (100% - T)
EBT = $24,000 * 100% / 75%
EBT = $24,000 * 1.3333
EBT = $31,999
EBIT = EBT + interest = $31,999 + $6,000
EBIT = $37,999
Invested capital =Notes payable + Long term Debt + Common stock
Invested capital = $24,000 + $75,000 + $250,000
Invested capital = $349,000
ROIC = [$37,999 * (1 - 0.25)] / $349,000
ROIC = [$37,999 * 0.75] / $349,000
ROIC = $28,499.25 / $349,000
ROIC = 0.081660
ROIC = 8.17%
Shirley's time sitting at her desk was interrupted when the human resources manager burst into her office with a particularly vexing problem - customer service ratings had been falling over the last quarter. The human resources manager explained that they were behind on training programs for their workers. Shirley assembled a task force consisting of the brightest minds in the organization and gave them a charge - to look at the previous quarter's issues and to develop training courses over the next 48 months to solve those issues. What roadblock is Shirley confronted with while trying to identify the true problem
Answer: conflicting viewpoints
Explanation: A roadblock is an obstacle or impediment. Shirley is confronted with conflicting viewpoints as a roadblock while trying to determine the true problem she is faced with. She probably holds opposing or contradictory perspectives to that of the Human Resource manager which explains the reason for assembling a team to specifically " look at the previous quarter's issues" and "to develop training courses over the next 48 months to solve those issues". Conflicting viewpoints is one of the problems to quantitative analysis which is a scientific approach to decision making. Others include: outdated solutions, understanding the model, beginning assumptions etc.
How is it useful to identify emerging patterns in looking for a trends?
Answer:
It is very useful to identify emerging patterns when looking for trends. Emerging patterns help to discover inherent differences in a dataset. They are powerful for constructing accurate and complete classifications of the dataset.
Explanation:
Emerging patterns present themselves as items with frequency changes that are significantly different from one dataset to another. Trends show the general directions of some variables. One discovers emerging patterns by looking at two datasets for two time periods. The trend will show if the pattern has increased or decreased in size, totally disappeared, or new patterns have currently emerged when compared to previous patterns.
There are different kinds of trends. Emerging patterns are useful as they;
They act as a means of knowing or finding out the distinctions present amidst a collection of data group.They are powerful tool for constructing right classifiers.What are Emerging Patterns?Theses are known as the patterns of the groups of items whose frequency changes very well from one dataset to another.
They are known to be very vital in getting the multi-dimensional differences between datasets/ or classes.
Learn more about Emerging patterns from
https://brainly.com/question/25860017
2006 2005 Total current assets $600,000 $560,000 Total investments 60,000 40,000 Total property, plant, and equipment 900,000 700,000 Total current liabilities 150,000 80,000 Total long-term liabilities 350,000 250,000 Preferred 9% stock, $100 par 100,000 100,000 Common stock, $10 par 600,000 600,000 Paid-in-Capital in excess of par-common stock 60,000 60,000 Retained earnings 325,000 210,000 If Net Income is $115,000 and interest expense is $30,000 for 2006, what is the return on stockholders' equity for 2006 (round percent to one decimal place)
Answer:
Return on stockholder equity = 11.2%
Explanation:
Average Stockholder equity
2006 2005
Deferred 9% stock 100,000 100,000
Common stock 600,000 600,000
Paid in capital - 60,000 60,000
Common stock
Deferred earnings 325,000 210,000
Stockholder equity $1,085,000 $970,000
Average stockholder equity = $1,085,000 + $970,000 / 2
Average stockholder equity = $1,027,500
Return on stockholder equity = Net Income / Average stockholder equity
Return on stockholder equity = $115,000 / $1,027,500
Return on stockholder equity = 0.11192
Return on stockholder equity = 11.192%
Return on stockholder equity = 11.2%
5. Firm Q is about to engage in a transaction with the following cash flows over a three-year period: Year 0 Year 1 Year 2 Revenue Received $10,000 $12,500 $18,000 Deductible expenses (3,400 (5,000 (7,000 Nondeductible expenses (800 (1,100 -0- If the firm’s marginal tax rate over the three-year period is 35% and its discount rate is 10%, compute the net present value of the transaction.
Answer: $12,830.91
Explanation:
Year 0
Net Cash = Revenue - Expenses - Tax
Tax = (Revenue - Deductible expenses) * tax rate
= ( 10,000 - 3,400) * 0.35
= $2,310
Net Cash = 10,000 - 3,400 - 800 - 2,310
= $3,490
Present Value is the same as this is Year 0.
Year 1
Tax = (Revenue - Deductible expenses) * tax rate
= ( 12,500 - 5,000) * 0.35
= $2,625
Net Cash = 12,500 - 5,000 - 1,100 - 2,625
= $3,775
Present Value is;
= 3,775 / ( 1 + 10%)
= $3,431.82
Year 2
Tax = (Revenue - Deductible expenses) * tax rate
= ( 18,000 - 7,000) * 0.35
= $3,850
Net Cash = 18,000 - 7,000 - 0 - 3,850
= $7,150
Present Value is;
= 7,150 / ( 1 + 10%) ^ 2
= $5,909.09
Net Present Value = PV0 + PV1 + PV2
= 3,490 + 3,431.82 + 5,909.09
= $12,830.91
Rio Coffee Shoppe sells two coffee drinks—a regular coffee and a latte. The two drinks have the following prices and cost characteristics: Regular Coffee Latte Sales price (per cup) $ 1.50 $ 2.80 Variable costs (per cup) 0.80 1.70 The monthly fixed costs at Rio are $5,148. Based on experience, the manager at Rio knows that the store sells 80 percent regular coffee and 20 percent lattes. Required: How many cups of regular coffee and lattes must Rio sell every month to break even?
Answer:
Breakeven quantity for regular coffee = 5,883
Breakeven quantity for lattes = 936
Explanation:
Breakeven quantity are the number of units produced and sold at which net income is zero
Breakeven quantity = fixed cost / price – variable cost per unit
fixed cost for lattes = 0.2 x $5,148. = $1,029.60
fixed cost for regular coffee = 0.8 x $5,148. = $4,118.40
Breakeven quantity for regular coffee = $4,118.40 / $ 1.50 - $0.8 = 5,883.4
Breakeven quantity for lattes = $1,029.60 / $ 2.80 - $ 1.70 = 936
Answer:
Rio Coffee Shoppe
Break-even point in units:
Break-even point for firm = Fixed costs/Contribution per unit
= $5,148/$1.80 = 2,860 units
Regular Coffee = 80% of 2,860 = 2,288 units
Lattes = 20% of 2,280 = 572 units
Explanation:
a) Data and Calculations:
Regular Coffee Latte
Sales price (per cup) $ 1.50 $ 2.80
Variable costs (per cup) 0.80 1.70
Contribution $0.70 $1.10
Fixed cost $5,148
Break-even point = Fixed costs/Contribution per unit
Regular Coffee = 80% of $5,148 = $4,118.40
Break-even point = $4,118.4/$0.70 = 5,884 units
Lattes = 20% of $5,148 = $1,029.60
Break-even point = $1,029.60/$1.10 = 936 units
b) The break-even point is the unit of sales required to cover the fixed costs with the contribution so that Rio Coffee Shoppe makes no profit or loss.
You are in talks to settle a potential lawsuit. The defendant has offered to make annual payments of $18,000, $26,500, $46,000, and $69,000 to you each year over the next four years, respectively. All payments will be made at the end of the year. If the appropriate interest rate is 4.3 percent, what is the value of the settlement offer today
Answer:
Total PV= $140,465.69
Explanation:
Giving the following information:
Cash flows:
Cf1= $18,000
Cf2= $26,500
Cf3= $46,000
Cf4= $69,000
The appropriate interest rate is 4.3 percent.
To calculate the present value, we need to apply the following formula on each cash flow:
PV= FV/(1+i)^n
Cf1= 18,000/1.043= 17,257.91
Cf2= 26,500/1.043^2= 24,360
Cf3= 46,000/1.043^3= 40,541.97
Cf4= 69,000/1.043^4= 58,305.81
Total PV= $140,465.69
Ban Co purchased 50, 5% Waylan Company bonds on January 1, 2016 for $50,500 cash Interest is payable annually on January 1 the January 1, 2017 annual interest payment would include a:__________.
a. debit to Interest Revenue for $2,500 B.
b. credit to Interest Revenue for $2,525
c. The entry to record C credit to Interest Receivable for $2,500 D.
d. credit to Debt Investments for $2.525
Answer:
a. debit to Interest Revenue for $2,500
Explanation:
Based on the information given we were told that Ban Company made a purchased of 50, 5% Waylan Company bonds for the amount of $50,500 which is a cash Interest that is payable annually which means that the annual interest payment would include a: DEBIT to Interest Revenue for $2,500 calculated as :
Interest Revenue=[(50 x $1,000)×5%]
Interest Revenue=$50,000×0.05
Interest Revenue =$2,500
Total revenue minus total cost is equal to
Loggers are much likely to supply wood to the market if property rights are not enforced. In the presence of market failures, public policy can improve economic efficiency. Classify the source of market failure in each case listed. Market Failure Market Power Externality A manufacturing plant dumps chemical waste into a nearby river, poisoning the water supply for a small town downstream. A single public utilities company is responsible for supplying electricity for an entire state. As a result, the utilities company can set the price of electricity.
Answer:
Over
Externality
Market power
Explanation:
Externality is a form of market failure where the activities of economic agents affect third parties not involved in production or consumption
Externality can be positive or negative
A good has negative externality if the costs to third parties not involved in production is greater than the benefits.
The costs of polluting the river by the firm is greater than the benefits. Thus, this causes negative externality
Taxation increases the cost of production and therefore discourages overproduction. Tax levied on externality is known as Pigouvian tax.
A firm has Market power when it can increase prices above the level that would exist that in a competitive market.
Firms that have market power are usually monopolies
A monopoly is when there is only one firm that exists in an industry
Question 1
5 pts
(02.01 LC)
Which of these factors is likely to have the greatest influence on purchases by consumers with a limited
amount of cash on hand?
-The price of a good or service
-The stock market prices
-Their own income
-Their personal preferences
Answer:
their own income is correct
Answer:
B
Explanation:
B : The stock market prices is correct.
You are negotiating a new labor contract with union officials. The contract covers a plant that has experienced operating losses over the past several years. You want to negotiate concessions from labor to reduce the losses. However, labor is refusing any compromises. You could tell them that, without concessions, the plant will be closed, although that is not true. Is bluffing ethical? Under what circumstances? What would Kant and Mill say? What would be the result under the Front Page test?
Answer:
Is bluffing ethical? Under what circumstances?
Bluffing is basically lying, and lying is wrong. But on some circumstances, specially when you are carrying out a game strategy (and want to win), then bluffing might not be so bad.
Personally, I believe that bluffing is not unethical when you are negotiating with unions. I have nothing against unions, but their duty is to get the highest possible salary and benefits for their members. On the other hand, the company must balance the interests of its employees, the community and its shareholders. Union delegates always make very high initial demands, the company offers a very low increase or raise, and then after negotiating you get to a middle point. So bluffing could be just a strategy in order to negotiate some concessions, e.g. no pay raise until the company starts making a profit again.
What would Kant and Mill say?
Kant believed that the morality of someone's actions should be judged based on their duty. Since it is your duty to try to get some labor concessions, then bluffing is not unethical.
Mill believed that the morality of someone's actions should be judged based on the results, or how much good or happiness results from them. In this case, I suppose that more people would be unhappy than happy if you actually get some labor concessions, so bluffing would be unethical.
What would be the result under the Front Page test?
The front page test basically wants you to look at the events from the point of view of a third party that is not involved in the actions. If you could read this on the front page of a newspaper and it happened to someone else, would it be ethical or unethical? Since I believe that bluffing is a valid game strategy, then if I read this on a newspaper I would be OK with it.
The most commong reason for leaving a site without purchasing includes:______.A. Customers could not find the items they were looking for.
B. Site did not look trustworthy.
C. Shipping charges were too high.
D. All the above.
Answer:
All of the above
Explanation:
A customer on visiting a website might decide not to go ahead with a purchase due to the following reasons
- They did not see the product in which they wish to buy after going through the different lists of products that can be found on the website.
- There are some parts of the site that looks suspicious to them such as payment options. Some customers may not comepletly trust the credibility of a site, this makes scared to put in their card details for payment for fear of being scammed online.
- There are some website that increase their shipping costs, this high price often discourage customers from buying a particular product.
Hence, in the scenario described above, all of above are the most common reasons for leaving a site without purchasing anything.
The primary purpose of the World Bank is to maintain an orderly system of world trade and exchange rates.
True
False
Answer:
The world bank maintains the orderly system of the world's trade. That is true
Explanation:
Check the above photos
Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2016, accounts receivable totaled $720,000. The allowance method is used to account for uncollectible accounts. The allowance for uncollectible accounts had a credit balance of $51,000 at the beginning of 2016 and $30,500 in receivables were written off during the year as uncollectible. Also, $3,100 in cash was received in December from a customer whose account previously had been written off. The company estimates bad debts by applying a percentage of 10% to accounts receivable at the end of the year. Required: 1. Prepare journal entries to record the write-off of receivables, the collection of $3,100 for previously written off receivables, and the year-end adjusting entry for bad debt expense. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Journal
Date Account Titles and Explanation Debit Credit
Allowance for uncollectible accounts $30,500
Accounts Receivables $30,500
(To write off uncollectibles during the year)
Journal
Date Account Titles and Explanation Debit Credit
Account receivables $3,100
Allowance for uncollectible accounts $3,100
(To reinstate receivables written off earlier)
Journal
Date Account Titles and Explanation Debit Credit
Cash $3,100
Account receivables $3,100
(To record the recovery of bad debts)
Journal
Date Account Titles and Explanation Debit Credit
Bad debt expenses $48,000
Allowance for uncollectible accounts $48,000
(To record bad debts expenses)
Workings
Closing allowance = Opening allowance - Receivables written off + Receivables reinstated = $51,000 - $30,500 + $3,100 = $23,600
Expenses Bad debt = Receivables at the end of 2016 * Estimated percentage = $720,000 * 10% = $72,000
Allowance to be created = Estimated bad debts - Balance of Allowance at year end = $72,000 - $23,600 = $48,400
Read the claim.
The tests for becoming a licensed driver seem unreasonably difficult;
What is the best counterclaim to complete the statement?
A. however, there is both a written and a driving portion of the test.
B. however, learner’s permits are issued at age 15 in most states.
C. however, drivers are unable to answer questions about road safety.
D. however, tougher requirements produce more prepared drivers.
Answer:D. However, tougher requirements produce more prepared drivers
Explanation:
I took the quiz
Answer:
Its D
Explanation:
Have a nice day
At the beginning of the year, Shinedown, Corp., had a long-term debt balance of $45,505. During the year, the company repaid a long-term loan in the amount of $10,880. The company paid $3,845 in interest during the year, and opened a new long-term loan for $9,695. How much is the ending long-term debt account on the company's balance sheet?
Answer:
$44,320
Explanation:
The below will be used to calculate the ending long term debt.
Ending long-term debt = Beginning long-term debt + New long-term debt - Repaid a long-term loan
Ending long-term debt = $45,505 + $9,695 - $10,880
Ending long-term debt = $44,320
Which of the following is an assumption of the theory of monopoly?
a. there are extremely high barriers to entry
b. there are many sellers
c. the product has a number of close substitutes
d. the product is of extremely high quality
Answer:
A
Explanation:
A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.
An example of a monopoly is a utility company
started with total assets of and total liabilities of . At the end of , total assets stood at and total liabilities were . Requirements 1. Did the stockholders' equity of increase or decrease during ? By how much? 2. Identify the four possible reasons that stockholders' equity can change. Requirement 1. Did the stockholders' equity of increase or decrease during ? By how much? (Enter a decrease with a minus sign or parentheses.) Change in stockholders' equity during the year is
Answer:
1. Assets = Equity + Liability
Equity = Assets - Liability
Opening Equity = 14,000 - 9,000
= $5,000
Closing Equity = 19,000 - 11,000
= $8,000
Increase ( Decrease) = 8,000 - 5,000
= Increased by $3,000
2. Four ways Equity can change.
Equity will increase if Common Stock is issuedEquity will increase if the company makes a profit ( Net Income ) as this will go to the Equity account as Retained earningsEquity will decrease if the company pays Dividends as those are paid from retained earningsEquity will decrease if there is a net loss.