Gilligan Corporation was established on February 15, Year 1. Gilligan is authorized to issue 700,000 shares of $15 par value common stock. As of December 31, Year 3, Gilligan's stockholders' equity accounts report the following balances: Common stock, $15 par, 700,000 shares authorized,70,000 shares issued and outstanding$1,050,000? Paid-in capital in excess of par - Common 140,000? $1,190,000? Retained earnings 665,000? Total stockholders' Equity $1,855,000? At the end of Year 3, Gilligan decides to issue a 5% stock dividend. At the time of issue, the market price of the stock was $46 per share.What is the amount of retained earnings that will be transferred to paid-in capital as a result of the stock dividend issued by Gilligan
Corporation?
A. $52,500
B. $161,000
C. $10,500,000
D. $35,000
Answer: B
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