you are to select the lettered item(s) that indicate(s) its effect(s) on the corporation’s… 1 answer below »

Required For each of the following numbered items, you are to select the lettered item(s) that indicate(s) its effect(s) on the corporation’s statements. If more than one effect is applicable to a particular item, be sure to indicate all applicable letters. (Assume that the state statutes do not permit declaration of no liquidating dividends except from earnings.)

Item

Effects

1.Declaration of a cash

a. Reduces working capital

dividend due in one month

B .Increases working capital

on noncumulative preferred

c. Reduces current ratio

d.Increases current ratio

2.Declaration and payment

e. Reduces the dollar amount of

of an ordinary stock

total capital stock

f.Increases the dollar amount of

3.Receipt of a cash dividend,

total capital stock

not previously recorded,

g. Reduces total retained

on stock of another

earnings

h.Increases total retained

4.Passing of a dividend on

earnings

cumulative preferred

i.Reduces equity per share

stocks.of

common stock

5.Receipt of preferred

j. Reduces equity of each

shares as a dividend on

common stockholder

stock held as a temporary

investment. This was not

 

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