At the quarterly meeting of Tangshan Mining Corporation, held on September 10th, the directors declared a $1.00 per share dividend for the firm's 100,000 shares of common stock outstanding. The net effect of declaring and paying this dividend would be to ________.
A) decrease total assets by $100,000 and increase stockholders equity by $100,000
B) decrease total assets by $100,000 and decrease stockholders equity by $100,000
C) increase total assets by $100,000 and increase stockholders equity by $100,000
D) increase total assets by $100,000 and decrease stockholders equity by $100,000

Question

Quizplus · Accepted Answer

Declaring and paying a dividend decreases total assets (cash outflow) and decreases stockholders' equity (reduction in retained earnings) by the amount of the dividend.

At the Quarterly Meeting of Tangshan Mining Corporation, Held on September