40.

Mancini Corporation owned 35,000 shares of Ferguson Corporation's $1 par value common stock, these shares were purchased in 2018 for $245,000. On June 10,2021, Mancini declared a property dividend of one share of Ferguson for every ten shares of Mancini held by a stockholder. On that date, when the market price of Ferguson was $11 per share, there were 230,000 shares of Mancini outstanding. What net reduction in Mancini's retained earnings would result from this property dividend?

(1) $92,000 (2) $161,000 (3) $253,000 (4) $345,000