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Current Attempt in Progress During January 2022, Sheffield Corp. paid a cash dividends of $2120. This ansaction O increases e
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Answer #1

Answer: reduces stockholders' equity by $2,120.

Explanation:

Dividends paid are not expenses. Hence, it do not affect the income statement.

While paying cash dividends, it will be deduct from stockholders' equity.

Therefore, stockholders' equity will be reduces when dividends are paid in cash.

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