Question text

Gibbs Corporation owned 20,000 shares of Oliver Corporation's P5 par value ordinary shares. These shares were purchased in 2014 for P180,000. On September 15, 2017, Gibbs declared a property dividend of one share of Oliver for every ten shares of Gibbs held by a shareholder. On that date, when the market price of Oliver was P14 per share, there were 180,000 shares of Gibbs outstanding. What NET reduction in retained earnings would result from this property dividend?

Select one:

a. P72,000

b. P162,000

c. P90,000

d. P252,000