54. On January 1, 2004, Dole, Inc., declared a 15% stock dividend on its common stock when the
market value of the common stock was $20 per share. Stockholders' equity before the stock
dividend was declared consisted of:
Common stock, $10 par value, authorized 200,000 shares;
issued and outstanding 120,000 shares $1,200,000
Additional paid-in capital on common stock 150,000
Retained earnings 700,000
Total stockholders' equity $2,050,000

What was the effect on Dole’s retained earnings as a result of the above transaction?

a. $180,000 decrease
b. $360,000 decrease
c. $600,000 decrease
d. $300,000 decrease