Question

Last year, Yang Software had 15,900 of sales,500 of net new equity, dividend payments of 75, addition to retained earnings of418, depreciation of 680, and interest expense of511. What was the total change in equity for Yang Software?

1) $1,674
2) $1,774
3) $1,874
4) $1,974

Answer 1

The total change in equity for Yang Software is calculated by adding the net new equity and the addition to retained earnings, then subtracting the dividends paid. This results in a total change in equity of $843, which does not match any of the provided options.

Step-by-step explanation:

To calculate the total change in equity for Yang Software, we need to consider both the increase in equity from net new equity and the addition to retained earnings, as well as any dividends paid to shareholders that decrease equity. The net new equity is given as $500 and the addition to retained earnings is $418. The dividend payments of $75 will reduce equity. Hence, the total change in equity is:

$500 (net new equity) + $418 (addition to retained earnings) - $75 (dividend payments) = $843

Therefore, the total change in equity for Yang Software is $843, which is not one of the options provided, suggesting there may be an error or omission in the question or the selection of provided answers. Other details such as sales, depreciation, and interest expense are not directly relevant to the calculation of total change in equity.