On January 1st CCL Ltd., a publically traded company, had total shareholders' equity of $1,590,000, of which $550,000 was retained earnings. The board of directors declared a stock dividend on September 1st of the current year, with a total dollar value of $150,000 and would result in an additional 10,000 common shares issued. This stock dividend distributed is to be distributed January 10th of the following year. In addition CCL earned a net profit of $140,000 in the current year. If CCL has no other equity accounts or transactions, how should the stock dividend be reported?

A) As a reduction in Retained Earnings and an increase in Stock Dividend Distributable.

B) As an increase in Contributed Surplus and a decrease in Retained Earnings

C) Because the shares have not yet been distributed, no amounts are required on the statement. Only a note disclosure is required.

D) As a reduction in Retained Earnings and an increase to Common Shares