This exercise will review the effects of various types of distributions to stockholders.

Instructions

For each transaction listed across the top of the following matrix, indicate the effect on each of the items listed down the left side of the matrix. Use an “I” to indicate an increase, a “D” to indicate a decrease, and a “NE” for no effect.

Item

Declaration of a cash dividend

Payment of a
previously re-
corded cash
dividend

Declaration and
distribution of a
small stock divi-
dend

Declaration and distribution of a large stock dividend

Stock
split

Assets

Total capital stock

Total additional Paid-in capital

Retained earnings

Total stockholders” equity

Par value per share

Total number of shares outstanding