4. Canton, Inc. issued 10,000 shares of $1 par value common stock at $10 per share. Mr. Smart, the bookkeeper, recorded this transaction with a $100,000 debit to Cash and a $100,000 credit to Common stock. As a result of this entry: A) Total assets will be overstated. B) Additional Paid-In Capital will be understated. C) Total stockholders' equity will be understated. D) Equity will be overstated. 5. Westward Electric sells electric appliances, including refrigerators. The company's experience in recent years indicates that warranty costs average 3.1% of sales. During April 2011, sales of refrigerators were $3,000,000 and cash payments for warranty service on refrigerators were $84,000. The journal entry to record the warranty expense for April is: A ACCOUNT Warranty Expense 84,000 Cash 84,000 Dr Cr B Liability for Warranties 84,000 Cash 84,000 93,000 Warranty Expense Liability for Warranties 93,000 D 93,000 Warranty Expense Cash 93,000 6. Which of the following events decreases shareholders' equity? A) Payment of a previously declared cash dividend. B) Declaration of a 5 percent stock dividend. C) Declaration of a cash dividend for preferred shares, D) Declaration of a 2-for-1 stock split