Problem

In June, their first month of operations, WYZ Co. paid $36,000 for advertising. $6,000 of the payment was for advertising that will appear in magazines in the following month (July). The rest of the payment was for advertising that appeared in magazines and newspapers during the month of June. How much expense should WYZ Co. recognize during the month of June under the accrual basis of accounting?

$6,000
$42,000
$36,000
$30,000

How does the declaration and payment of dividends during the accounting period affect net income and stockholders' equity?

net income will decrease; owners' equity will increase
net income will not be affected; owners' equity will decrease
net income will decrease; owners' equity will decrease
net income will decrease; owners' equity will not be affected.