Question: On December 1, 2011, Nilo Corp. declared a property dividend of marketable securities to be distributed on December 31, 2011, to stockholders of record on

On December 1, 2011, Nilo Corp. declared a property dividend of marketable securities to be distributed on December 31, 2011, to stockholders of record on December 15, 2011. On December 1, 2011, the trading securities had a carrying amount of $60,000 and a fair value of $78,000.

What is the effect of this property dividend on Nilo’s 2011 retained earnings, after all nominal accounts are closed?

a. $0.

b. $18,000 increase.

c. $60,000 decrease.

d. $78,000 decrease.

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