Lowell Company announces a large stock dividend of 50% of the 2 million outstanding shares of common stock. The current price per share is $10.00. Par value of the stock is $1 per share. What effect does this dividend have on retained earnings?

	A.	$1,000,000 decrease
	B.	$2,000,000 decrease
	C.	$8,936,000 decrease
	D.	$3,823,280 decrease
	E.	None of the above

As of 2012, Lowell Corp. has $10 par, 5% preferred stock, 4,000 shares outstanding, and $1 par common stock with 20,000 shares outstanding. The preferred stock is cumulative and preferred stockholders last received a dividend in 2011. If the company wants to distribute $2 per share to the common stockholders in 2012, what is the total amount of dividends that the company must pay in the current year?

	A.	$46,000
	B.	$42,000
	C.	$20,000
	D.	$22,000
	E.	None of the above