Listed below are various transactions that a company incurred during the current year. Indicate the impact on total stockholders’ equity for each scenario. Specifically state whether stockholders’ equity would “Increase,” “Decrease,” or have “No Effect” as a result of each transaction listed below. Consider each transaction independently.
_____ 1. A stock dividend equal to 30% of the previously outstanding shares is declared.
_____ 2. New shares of common stock are issued for cash.
_____ 3. Treasury shares of common stock are purchased (assume the cost method).
_____ 4. Cash dividends are paid to shareholders.