Add two signed numbers examples below.

EX1:  +7,  -6 : positive and negative number.

+7  -6

Step 1: Convert to 2's complement for negative numbers.

+7 (in Binary 4’b0111)

-6 (in Binary 4’b1110) = 1 010, save msb as sign bit and convert lower 3 bits in 2’s complement.

Step 2

Add and store the result in sum register of 5 bits wide.  

   0 111

  1 010

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1 0 001

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Step 3

Carry into signed bit and carry out of signed bit. In this scenario discard MSB msb bit. Use lower 4 bits as signed representation.  

Result: 4’b0 001 = 0x1 = +1