Vaughn Corporation owned 16000 shares of Ivanhoe Corporation. These shares were purchased in 2017 for $138000. On November 15, 2021, Vaughn declared a property dividend of one share of Ivanhoe for every ten shares of Vaughn held by a stockholder. On that date, when the market price of Ivanhoe was $29 per share, there were 138000 shares of Vaughn outstanding. What gain and net reduction in retained earnings would result from this property dividend?

Gain

Net Reduction in Retained Earnings

$0

$400200

$281175

$ 36000

$281175

$119025

$0

$119025