Cash dividends on the $10 par value common stock of Garrett Company we as follows:

1st quarter of 2016 $800,000

2nd quarter of 2016 900,000

3rd quarter of 2016 1,000,000

4th quarter of 2016 1,100,000

The 4th quarter cash dividend was declazred on December 21, 2016, to shareholders of record on December 31, 2016. Payment of the 4th quarter cash dividend was made on January 18, 2017. In addiation Garrett declared a %5 stock dividend on its $10 par value common stock on December 3, 2016, when there were 300,000 shares issued and outstanding and the marker value of the common stock was $20 per share. The shares were issued on December 24, j2016. what was the effect on Garretts shareholders equity accounts as a resultof the preceding transactions?

Common stock Additional Paid in Capital Retained Earnings

A. $0 $0 $3,800,00 Dr

B. $150,000 Cr $0 $3,950,000 Dr

C. $150,000 Cr $150,000 Cr $4,100,000 Dr

D. $300,000 Cr $300,000 Dr $3,800,000 Dr