The P Company has the following capital structure:
Common stock ($5 par, 250,000 shares) $1,250,000
Contributed capital in excess of par $5,000,000
Retained earnings $4,000,000
The company declares a 10 percent stock dividend. The pre-stock dividend market price of the company’s stock is $50. Determine the balance in the retained earnings account after the stock dividend. Determine the balance in the common stock account after the stock dividend.