How will a company's working capital and total stockholders' equity be affected by the recording of the declaration of a stock dividend? (Assume the stock dividend is distributed at a later date.) Working Capital Total Stockholders Equity I. decrease decrease II. decrease no effect III. no effect no effect III. no effect decrease \begin{array}{lll} & ext { Working Capital} & ext { Total Stockholders Equity}\ ext { I. } & ext { decrease } & ext { decrease } \ ext { II. } & ext { decrease } & ext { no effect } \ ext { III. } & ext { no effect } & ext { no effect }\ ext { III. } & ext { no effect } & ext { decrease }\end{array} I. II. III. III. Working Capital decrease decrease no effect no effect Total Stockholders Equity decrease no effect no effect decrease A) IB) IIC) IIID) IV

Question

How will a company's working capital and total stockholders' equity be affected by the recording of the declaration of a stock dividend? (Assume the stock dividend is distributed at a later date.)     Working Capital  Total Stockholders Equity  I.   decrease   decrease   II.   decrease   no effect   III.   no effect   no effect   III.   no effect   decrease  \begin{array}{lll} &  	ext { Working Capital} &  	ext { Total Stockholders Equity}\  	ext { I. }  &  	ext { decrease }  &  	ext { decrease } \	ext { II. }  &  	ext { decrease }  &  	ext { no effect } \	ext { III. }  &  	ext { no effect }  &  	ext { no effect }\	ext { III. }  &  	ext { no effect }  &  	ext { decrease }\end{array}  I.   II.   III.   III.  ​  Working Capital  decrease   decrease   no effect   no effect  ​  Total Stockholders Equity  decrease   no effect   no effect   decrease  ​ A) IB) IIC) IIID) IV

Jessica Silva · Accepted Answer

Final Answer : C, Explanation :  The declaration of a stock dividend does not affect working capital because it involves only equity accounts, and it does not immediately affect total stockholders' equity because it reallocates amounts within equity.

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