QUESTION 19

1. On January 1, 2017, Susann, Inc., declared a 15% stock dividend on its common stock when the market value of the common stock was $20 per share. Shareholders' equity before the stock dividend was declared consisted of:

   Common stock, $10 par value, authorized 40,000 shares; issued and outstanding 5,000 shares	$50,000
   Additional paid-in capital on common stock	200,000
   Retained earnings	60,000
   Total shareholders' equity	$310,000
   	.

   What happened to retained earnings as a result of the stock dividend declaration?

   		$6,000 decrease
   		$7,500 decrease
   		$15,000 increase
   		No change
   		None of these choices is correct.