20. The van Buren Bureau Company has stockholder's equity as follows:

Common Stock, $1 par $30,000

Additional Paid in Capital - Common Stock $210,000

Retained Earnings $149,837

Total Stockholder's Equity $389,837

The company is considering issuing a 30% stock dividend. The current market price of the companys stock is $6/share.

If this dividend is declared and issued, which of the following statements is true?

1. Contributed capital will be increased by $54,000.
2. Retained earnings will be reduced by $54,000.
3. Contributed capital will be increased by $54,000.
4. Retained earnings will be reduced by $54,000.
5. All of the above answers are true.