Question 8. Retained earnings and dividends (8 marks) Stables Corporation had shareholders' equity on December 31, 2016 as follows: Common Stock, 1,000,000 shares authorized, 500,000 shares issued Retained Earnings $3,500,000 3,000,000 The following transactions occurred during 2017: Feb. 15 Mar. 20 May 1 The board of directors declared a 5% stock dividend to shareholders of record on March 1, payable March 20. The stock was trading for $6.00 per share. Paid the stock dividend. The stock was trading for $6.50 per share. A cash dividend of $1.10 per share was declared by the board of directors to shareholders of record on May 20, payable June 1. Paid the cash dividend. The board decided to split the stock 4 for 1, effective on September 1. Stock split 4 for 1. Earned net income of $800,000 for the year. June 1 Aug. 20 Sept. 1 Dec. 31 Required: Prepare a Statement of Retained Earnings as of Dec. 31, 2017