Marshall Pottery Barn is a privately owned importer of Mexican pottery and garden supplies. The firm plans on paying a $1.50 per share dividend on each of its 5,000 shares of common stock. The firm’s most recent balance sheet just before payment of the dividend looks like the following:

a. What would happen to the firm’s balance sheet after payment of the cash dividend?
b. If the above balance sheet also represented market values (as well as book values), how would it change following the payment of the cashdividend?

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18,000 22,000 30,000 70,000 130,000 $200,000 Cash Accounts receivable Inventories S 22,000 5,000 S 27,000 33.000 140,000 $200,000 Accounts payable Notes payable Current liabilities Current assets Long-term debt Equity Fixed assets Total assets Total