Question: E10-26A. (Learning Objectives 4, 6: Record a stock dividend and report stockholders' equity) The stockholders' equity for Dairy King Drive-Ins (DK) on April 16, 2015,

E10-26A. (Learning Objectives 4, 6: Record a stock dividend and report

E10-26A. (Learning Objectives 4, 6: Record a stock dividend and report stockholders' equity) The stockholders' equity for Dairy King Drive-Ins (DK) on April 16, 2015, follows: A1 Stockholders' Equity 2 Common stock, $0.30 par, 2,600,000 shares 31 mthori2ed' 750,00 sharesissued S 6 Paid in capital in excess of par-common Retained earnings Accumulated other comprehensive income (loss 225,000 1,614,400 2154,000 Total stockholders' equity On April 16, 2015, the market price of DK common stock was $20 per share. Assume DK declared and distributed a 15% stock dividend on this date. Requirements 1. Journalize the declaration and distribution of the stock dividend. 2. Prepare the stockholders' equity section of the balance sheet after the stock dividend. 3. Why is total stockholders' equity unchanged by the stock dividend? 4. Suppose DK had a cash balance of $610,000 on April 17, 2015. What is the maximum amount of cash dividends DK can declare

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