JP Corporation reported the following stockholders' equity:

Requirements
1. JP Corporation's agreement with its bank lender restricts JP's dividend payments for the cost of treasury stock the company holds. How much is the maximum amount of dividends JP can declare?
2. Why would a bank lender restrict a corporation's dividend payments and treasury stockpurchases?

Paid-in capital: Preferred stock, $1.50, no-par, 18,000 shares authorized, O issued Common stock, $1 par, 483,000 sharcs authorized, 150,000 shares issucd Paid-in capital in cxcess of par-common Total paid-in capital Retained carnings Treasury stock, 5,000 shares at cost Total stockholders' equity $150,000 336,000 S486,000 506,000 (35,000) $957,000