Boxer Company owned 20,000 shares of King Company that were purchased in 2016 for $500,000. On May 1, 2018, Boxer declared a property dividend of 1 share of King for every 10 shares of Boxer stock. On that date, there were 50,000 shares of Boxer stock outstanding. The market value of the King stock was $30 per share on the date of declaration and $32 per share on the date of distribution. By how much is retained earnings reduced by the property dividend?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Boxer Company owned 20,000 shares of King Company that were
purchased in 2016 for $500,000O. On May 1, 2018, Boxer declared
a property dividend of 1 share of King for every 10 shares of Boxer
stock. On that date, there were 50,000 shares of Boxer stock
outstanding. The market value of the King stock was $30 per share
on the date of declaration and $32 per share on the date of
distribution. By how much is retained earnings reduced by the
property dividend?
Transcribed Image Text:Boxer Company owned 20,000 shares of King Company that were purchased in 2016 for $500,000O. On May 1, 2018, Boxer declared a property dividend of 1 share of King for every 10 shares of Boxer stock. On that date, there were 50,000 shares of Boxer stock outstanding. The market value of the King stock was $30 per share on the date of declaration and $32 per share on the date of distribution. By how much is retained earnings reduced by the property dividend?
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