The stockholders equity for frozen yogurt cooperation on may 11th 2017 follows (

Question

The stockholders equity for frozen yogurt cooperation on may 11th 2017 follows (2nd picture) Requirement 1. journalize the declaration and digital distribution of the stock dividend. Requirement 2. prepare the stockholders equity section of the balance sheet after the stock dividend. Requirement 3. why is total stockholders equity unchanged by the stock dividend? Requirement 4. suppose frozen yogurt had a cash balance of $560,000 on May 12, 2017. What is the maximum amount of cash dividends frozen yogurt can declare?
Everything is in the photos. Please use the options in the dropbox photos so i know where to put the answers! Thanks so much for your help!!

Explanation / Answer

ans 1 Accounts title Dr Cr 11-May Retained earnings 2660000 Common stock 56000 Paid in capital in excess of par-Common stock 2604000 Generally the entry is below one but as declaration and distribution is on same date hevnce the above entry is passed declared DR Cr Stock Dividend (140000*19) 2660000 Stock dividend distributable (1400000*.4) 56000 Paid in capital in excess of par-Common stock 2604000 No. of stock issued 700000*20% 140000 Stock dividend distributable (1400000*.4) 56000 Common stock 56000 ans 2 Stockholder Equity section Common stock $.4 par 2100000 shares authorized 840000 shares issued and outstanding 336000 Paid in capital in excess of par-Common stock 4110773 (1506773+2604000) Retained Eranings (7122000-2660000) 4462000 Accumulated other comprehensive Income/(loss) -220000 Stockholder equity 8688773 ans 3 No assets the company transferred $2660000 from retained earnings to common stock and paid in capital in excess of par ans 4 Cannot exceed the balance in the rEtained earnings account $4462000

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