(Learning Objective 4: Accounting for cash dividends) Greentea Corporation earned a net income of $95,000 during the year ended December 31, 20X6. On December 15, Greentea declared the annual cash dividend on its 6% preference shares (11,000 shares with total par value of $110,000) and a $1.00 per share cash dividend on its ordinary shares

(45,000 shares with total par value of $450,000). Greentea then paid the dividends on January 4, 20X7.

Journalize for Greentea Corporation:

a. Declaring the cash dividends on December 15, 20X6.

b. Paying the cash dividends on January 4, 20X7.

Did Retained Earnings increase or decrease during 20X6? By how much?