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 $3,500,000 Retained Earnings 3,000,000 The following transactions occurred during 2017: Feb. 15 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. Mar. 20 Paid the stock dividend. The stock was trading for $6.50 per share. May 1 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. June 1 Paid the cash dividend. Aug. 20 The board decided to split the stock 4 for 1, effective on September 1. Sept. 1 Stock split 4 for 1. Dec. 31 Earned net income of $800,000 for the year. Required: Prepare a Statement of Retained Earnings as of Dec. 31, 2017.