Problem

Comparing and contrasting cash and stock dividendsCompare and contrast the accounting for...

Comparing and contrasting cash and stock dividends

Compare and contrast the accounting for cash dividends and stock dividends.

Requirement

1. In the space provided, insert either “Cash dividends,” “Stock dividends,” or “Both cash dividends and stock dividends” to complete each of the following statements:

a. ________ decrease Retained earnings.

b. ________ has(have) no effect on a liability.

c. ________ increase paid-in capital by the same amount that they decrease Retained earnings.

d. ________ decrease both total assets and total stockholders’ equity, resulting in a decrease in the size of the company.

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