Question

Indicate whether the following actions would increase, decrease, or not affect Indigo Inc.'s total assets, liabilities, and stockholders' equity:

Question Assets Liabilities Stockholders Equity
1. Authorizing and issuing stock certificates in a stock split
2. Declaring a stock dividend
3. Issuing stock certificates for the stock dividend declared in (2)
4. Declaring a cash dividend
5. Paying the cash dividend declared in (4)

Answer 1

Answer:

                                              Assets       Liabilities      Stockholder's Equity

1. Authorizing and issuing   Not affect   Not affect        Not affect

  stock certificates in a

  stock split  

2. Declaring a stock               Not affect    Not affect      Not affect

   dividend

3. Issuing stock certificates    Not affect    Not affect    Not affect

   for the stock dividend

   declared in (2)

4. Declaring a cash dividend   Not affect    Increase      Decrease

5. Paying the cash dividend     Decrease Decrease     Not affect

   declared in (4)