Mike Bradley & Company, a Family-Owned Corporation, Declared and Distributed

Multiple Choice

Mike Bradley & Company, a family-owned corporation, declared and distributed a property dividend from its overstocked inventory instead of declaring its usual cash dividend. The inventory's book value exceeded its fair value. The excess is:

A) Reported as a direct reduction of shareholders' equity.
B) Reported as other comprehensive income.
C) Reported as a loss.
D) Not reported.