Gilligan Corporation was established on February 15, Year 1. Gilligan is authorized to issue 400,000 shares of $12 par value common stock. As of December 31, Year 3, Gilligan's stockholders' equity accounts report the following balances:
Common stock, $12 par, 400,000 shares authorized,
40,000 shares issued and outstanding
$
480,000
Paid-in capital in excess of par - Common
80,000
$
560,000
Retained earnings
485,000
Total stockholders' Equity
$
1,045,000
At the end of Year 3, Gilligan decides to issue a 5% stock dividend. At the time of issue, the market price of the stock was $38 per share.
What is the amount of retained earnings that will be transferred to paid-in capital as a result of the stock dividend issued by Gilligan Corporation?
$76,000
$4,800,000
$20,000
$24,000
none of the above