Example $32$ Watson Corporation owned $600,000$ shares of Nixon Corporation stock. On December $31,20$X$4,$ when Watson's account "Investment in Common Stock of Nixon Corporation" had a carrying value of $\backslash (\backslash$$ $5\backslash )$ per share, Watson distributed these shares to its stockholders as a dividend. Watson originally paid $\backslash (\backslash$$ $8\backslash )$ for each share. Nixon has $\backslash (2,000,000\backslash )$ shares issued and outstanding, which are traded on a national stock exchange. The quoted market price for a Nixon share was $\backslash (\backslash$$ $7\backslash )$ on the declaration date and $\backslash (\backslash$$ $9\backslash )$ on the distribution date. What would be the reduction in Watson's stockholders' equity as a result of the above transactions? Example $33$ The stockholder's equity of Ashley Company at July $31,20$x$4$ is presented below: On August $1,20$X$4,$ the board of directors of Ashley declared a $10\backslash \%$ stock dividend on common stock, to be distributed on September $15$th$.$ The market price of Ashley's common stock was $\backslash (\backslash$$ $35\backslash )$ on August $1,20$X$4,$ and $\backslash (\backslash$$ $38\backslash )$ on September $15,20$X$4.$ What is the amount of the debit to retained earnings as a result of the declaration and distribution of this stock dividend?