If the board of directors authorizes a $100,000 restriction of retained earnings for a future plant expansion, the effect of this action is to

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Authorization of a $100,000 restriction of retained earnings for a future plant expansion reduces the amount of retained earnings available for dividend declarations. This means that the company's profits that are not paid out to shareholders as dividends will be set aside for the plant expansion and cannot be used for other purposes, such as distribution to shareholders. This restriction does not directly affect total assets, total stockholders' equity, or total liabilities.

If the Board of Directors Authorizes a $100,000 Restriction of Retained