On January 1, 2014, Dodd, Inc., declared a 15% stock dividend on its common stock when the fair value of the common stock was $30 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 Dodd's retained earnings as a result of the above transaction?
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