The board of directors of Lark Corporation declared a cash dividend of $3.50 per share on 57,000 shares of common stock on June 14,20x5.The dividend is to be paid on July 15,20x5,to shareholders of record on July 1,20x5.The effects of the entry to record the payment of the dividend on July 15,20x5,are to

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The correct answer is C) decrease liabilities and decrease assets. When a company pays a dividend, it reduces its cash assets (an asset account decreases) and reduces its dividends payable liability (a liability account decreases), with no direct effect on stockholders' equity at the time of payment.

The Board of Directors of Lark Corporation Declared a Cash