George Corporation declared a cash dividend of $10,000 on January 17. This dividend was payable to shareholders of record on February 10, and payment was made on March 2. As a result of this cash dividend, working capital will increase (decrease) by what amount on

Answers:

January 17

February 10

A)

$0

$0

January 17

February 10

B)

$10,000

$0

January 17

February 10

C)

$(10,000)

$0

January 17

February 10

D)	$(10,000)	$10,000

Question 4

0 out of 5 points

On January 2, Year 7, Teth Co. declared a cash dividend of $800,000 to shareholders of record on January 9, Year 7. It was payable on January 29, Year 7. The dividend is legally permissible. The following information was included in the financial statements dated December 31, Year 6:

After-tax net income	$200,000
Common stock	300,000
Additional paid-in capital	700,000
Retained earnings	500,000

Accordingly, Teth must debit

Answers:	A) Retained earnings for $800,000.
	B) Common stock for $300,000.
	C) Additional paid-in capital for $300,000.
	D) The capital accounts ratably for the amount of the liquidating dividend.