MANAGEMENT

Detailed explanation-1: -Answer and Explanation: Explanation: Stock Dividend decreases the ploughed earnings of the stockholders’ equity and increases the common equity of the stockholders’ equity of the balance sheet. So, the impact on total stockholders’ equity is nullified.

Detailed explanation-2: -The journal entry to record the declaration of the cash dividends involves a decrease (debit) to Retained Earnings (a shareholders’ equity account) and an increase (credit) to Dividends Payable (a liability account):

Detailed explanation-3: -Stock dividends are recorded by moving amounts from retained earnings to paid-in capital. The amount to move depends on the size of the distribution. A small stock dividend (generally less than 20-25% of the existing shares outstanding) is accounted for at market price on the date of declaration.

Detailed explanation-4: -Dividends are not specifically part of stockholder equity, but the payout of cash dividends reduces the amount of stockholder equity on a company’s balance sheet. This is so because cash dividends are paid out of retained earnings, which directly reduces stockholder equity.