Excerpts from the Statement of Financial Position for Baldwin Corporation

question 149

Multiple Choice

Excerpts from the Statement of Financial Position for Baldwin Corporation as of September 30, Year 5, are presented below.
$\begin{array}{lc}\text { Cash } & \$ 950,000 \\\text { Accounts receivable (net) } & 1,675,000 \\\text { Inventories } & 2,806,000\\\text { Total current assets }&\$5,431,000\\\\\text { Accounts payable } & \$ 1,004,000 \\\text { Accrued liabilities } & 785.000 \\\text { Total current liabilities } & \$ 1.789 .000\end{array}$ The Board of directors of Baldwin Corporation met on October 4, Year 5, and declared regular quarterly cash dividends amounting to $750,000 ($0.60 per share) .The dividend is payable on October 25, Year 5, to all shareholders of record as of October 12, Year 5.
Assume that the only transactions to affect Baldwin Corporation during October Year 5 are the dividend transactions and that the closing entries have been made.
(CMA adapted, Dec 89 #15) Refer to the Baldwin Corporation example.Baldwin's total shareholders' equity would be

• A)unchanged by the dividend declaration and decreased by the dividend payment.
• B)decreased by the dividend declaration and increased by the dividend payment.
• C)unchanged by either the dividend declaration or the dividend payment.
• D)decreased by the dividend declaration and unchanged by the dividend payment.
• E)none of the above