The stockholders' equity of Howell Company at July 31, 2012 is presented below: Common stock, par value $20 authorized 400,000 shares; issued and outstanding 160,000 shares 3,200,000 Paid-in capital in excess of par 160,000 Retained earnings 650,000

On August 1, 2012 the board of directors of Howell declared a 10% stock dividend on common stock, to be distributed on September 15th. The market price of Howell's common stock was $35 on August 1, 2012, and $38 on Sepetmber 15, 2012. What is the amount of the debit to retained earnings as a result of the declaration and distribution of this stock dividend?

a. 320,000

b. 560,000

c. 608,000

d. 400,000

Can you breakdown the calculation.