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KIM Corporation owned 50,000 shares of SHIN Corporation. These shares were purchased in 2014 for $550,000. On November 15, 2018, KIM declared a property dividend

KIM Corporation owned 50,000 shares of SHIN Corporation. These shares were purchased in 2014 for $550,000. On November 15, 2018, KIM declared a property dividend of one share of SHIN for every ten shares of KIM held by a stockholder. On that date, when the market price of SHIN was $25 per share, there were 240,000 shares of KIM outstanding. What gain and net reduction in retained earnings would result from this property dividend?

a.

Gain Net Reduction in Retained Earnings

$24,000 $ 576,000

b.

Gain Net Reduction in Retained Earnings

$336,000 $ 264,000

c.

Gain Net Reduction in Retained Earnings

$400,000 $ 144,000

d.

Gain Net Reduction in Retained Earnings

$600,000 $ 24,000

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