Katie Company had 40,000 shares of $2 par value common stock outstanding prior to a 40% common stock dividend declaration and distribution. The market value of the common stock on the declaration date was $10. Which of the following statements incorrectly describes the effect of recording the common stock dividend? Total stockholders' equity remained the same. Retained earnings decreased $32,000. Additional paid-in capital remained the same. Additional paid-in capital increased $128,000.