Reference no: EM132811636

A company issued 100,000 shares of $1 par value stock for $25 per share. Subsequently, the company declared and paid a $3 (per share) stock dividend. On the date the dividend was declared, the market price of the shares is $50 per share.

Question 1: What is the effect of the dividend on Common Stock?

a. Common Stock increased

b. Common Stock decreased

c. Common Stock remained the same

d. None of the above

Question 2: Refer to the previous question. By what amount did Common Stock change, if at all? (If the account balance or amount did not change, state your answer as "$0.")

Question 3: What is the effect of the dividend on Paid-in Capital?

a. Paid-in Capital increased

b. Paid-in Capital decreased

c. Paid-in Capital remained the same

d. None of the above

Question 4 Refer to the previous question. By what amount did Paid-in Capital change, if at all? (If the account balance or amount did not change, state your answer as "$0.")

Question 5: What is the effect of the dividend on total equity and total assets?

a. Total equity increased and total assets decreased

b. Total equity increased and total assets increased

c. Total equity decreased and total assets decreased

d. Total equity decreased and total assets increased

e. None of the above

Question 6: Refer to the previous question. By what amount did total equity and total assets change, if at all? (If the account balance or amount did not change, state your answer as "$0.")