93. Gibbs Corporation owned 20,000 shares of Oliver Corporation's $5 par value common stock. These shares were purchased in 2022 for $225,000. On September 15, 2026, Gibbs declared a property dividend of one share of Oliver for every ten shares of Gibbs held by a stockholder. On that date, when the market price of Oliver was $35 per share, there were 180,000 shares of Gibbs outstanding. What NET reduction in retained earnings would result from this property dividend? a. $202,500 b. $630,000 c. $213,750 d. $427,500 Ans: A, LO: 3, Bloom: AP, Difficulty: Difficult, Min: 4, AACSB: Knowledge, AICPA BC: None, AICPA AC: Measurement, Interpretation and Analysis, AICPA PC: None, IMA: Reporting and Control: Financial Statement Preparation, IFRS: None Solution: (180,000 + 10) x $35 = $630,000; $630,000 - [$630,000 - ($225,000 x 18/20)] = $202,500.