Cash Dividends Declared on the No Par Value Common Shares

Cash dividends declared on the no par value common shares of Athens Corp. were as follows:

$\begin{array}{ll}\ \text{ 1st quarter of 2020.......................................} & \quad\quad \quad \quad\quad \quad \quad \quad \quad \text{\$ 330,000 \quad \quad \quad } \\\text{ 2nd quarter of 2020 ......................................} & \quad\quad \quad \quad\quad \quad \quad \quad \quad \text{\ 350,000 \quad \quad \quad } \\ \text{ \ 3rd quarter of 2020 .......................................} & \quad\quad \quad \quad\quad \quad \quad \quad \quad \text{\ 420,000 \quad \quad \quad } \\\text{ 4th quarter of 2020 ......................................} & \quad\quad \quad \quad\quad \quad \quad \quad \quad \text{\ 450,000 \quad \quad \quad } \\\ \end{array}$


The 4th quarter cash dividend was declared on December 20, 2020, to shareholders of record on December 31, 2020, to be paid on January 9, 2021. In addition, Athens declared a 10% common stock dividend on December 1, 2020, when there were 400,000 shares issued and outstanding, and the market value of the common shares was $ 16 per share. The shares were issued on December 21, 2020. What was the effect on Athens' shareholders' equity accounts during 2020 as a result of the above transactions?

$$\begin{array}{l}\text {\(\underline{\text{ Common Shares }}\)~~~~~~~~ \(\underline{\text{ Retained Earnings }}\) }\\\begin{array} { l r l } \text { A) } & \text {\( \$-0 -\) } & ~~~~~~~~~~~~\text { \( \$ 1,550,000 \) } \\\text { B) } & \text { \( \$ 540,000 \) } &~~~~~~~~~~~~ \text { \( \$ 1,740,000 \) } \\\text { C) } & \text { \( \$ 640,000 \) } &~~~~~~~~~~~~ \text { \( \$ 2,190,000 \) } \\\text { D) } & \text { \( \$ 300,000 \) } & ~~~~~~~~~~~~\text { \( \$ 1,950,000 \)}\end{array}\end{array}$$