Reference no: EM131811956

Question - The stockholders' equity section of Milroy Corporation as of December 31, 2012, was as follows:

Common stock, par value $2; authorized 20,000 shares; issued and outstanding 10,000 shares $ 20,000

Paid-in capital in excess of par 30,000

Retained earnings 90,000

$140,000

On March 1, 2013, the board of directors declared a 10% stock dividend, and accordingly 1,000 additional shares were issued. On March 1, 2013, the fair market value of the stock was $6 per share. For the two months ended February 28, 2013, Milroy sustained a net loss of $10,000. What amount should Milroy report as retained earnings as of March 2, 2013?

a. $74,000.

b. $78,000.

c. $84,000.

d. $88,000.