What was the effect on Crook retained earnings

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Question - On January 1, 2020, when the market value of their common shares was $15 per share, Crooks Inc. declared a 10% common stock dividend. Shareholders' equity before the stock dividend was declared was:

Common shares, no par value, authorized 300,000 shares, issued and outstanding 180,000 shares $2,125,000

Retained earnings 2,550,000

Total shareholders' equity $4,675,000

Required - What was the effect on Crook's retained earnings as a result of the stock dividend?

a, $750,000 decrease

b, $270,000 decrease

c, $540,000 decrease

d, $450,000 decrease

Reference no: EM132996907

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