Park Avenue Toys Reported the Following Information at December 31,2017

Park Avenue Toys reported the following information at December 31,2017: $\begin{array}{lr}\text { Common stock } \$ 3 \text { par, } 10,000 \text { shares authorized } & \$ 30,000 \\\text { Additional paid-in capital-common } & 80,000 \\\text { Retained earnings } & \underline{40,000} \\\text { Total contributed capital and retained earnings } & \$ 150,000 \\\text { Less: Treasury stock ( } 5,000 \text { common shares at cost) } & \underline{(10,000)} \\\text { Total stockhol ders' equity } & \underline{ \$ 140,000}\end{array}$

Answer the following questions for Park Avenue Toys.
1.
Would the book value per share increase,decrease,or remain the same,if the company declared a 3-for-1 stock split on December 31,2017? Explain.

2. If cash dividends were declared on January 10,2018 , at $\$ 1$ per share, by how much would retained earnings decrease as a result? (Assume that the 3 -for-1 stock split occurred.)