Jalisco, Inc., had 300,000 shares issued and 250,000 shares outstanding of its $8 par value common stock and its Retained Earnings account balance was $750,000 on December 31, Year 1. On January 1, Year 2, the board of directors declared a 12% stock dividend to its common shareholders when the market value of the stock was $17 per share.
Required: a)Determine the decrease in retained earnings as a result of the stock dividend.b)How many shares are outstanding after the stock dividend?

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The Answer of Jalisco, Inc., had 300,000 shares issued and 250,000 shares outstanding of its $8 par value common stock and its Retained Earnings account balance was $750,000 on December 31, Year 1. On January 1, Year 2, the board of directors declared a 12% stock dividend to its common shareholders when the market value of the stock was $17 per share.
Required: a)Determine the decrease in retained earnings as a result of the stock dividend.b)How many shares are outstanding after the stock dividend?