Gain and net reduction in retained earnings

Reference no: EM1364832

Pierson Corporation owned 10,000 shares of Hunter Corporation. These shares were purchased in 2007 for $90,000. On November 15, 2011, Pierson declared a property dividend of one share of Hunter for every 10 shares of Pierson held by a stockholder. On that date, when the market price of Hunter was $14 per share, there were 90,000 shares of Pierson outstanding. What gain and net reduction in retained earnings would result from this property dividend?

Gain Net Reduction In Retained Earnings

A 0 126,000

B 0 81,000

C 45,000 81,000

D 45,000 36,000

Reference no: EM1364832

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