The shareholders' equity for Best in Show Cinemas Ltd. (BSC) (adapted) at December 31, 2016, appears as

Question:

The shareholders' equity for Best in Show Cinemas Ltd. (BSC) (adapted) at December 31, 2016, appears as follows:
Shareholders' Equity
Common shares, 2,000,000 shares authorized,
500,000 shares issued.................................................................................. $1,012,000
Retained earnings......................................................................................... 7,122,000
Total shareholders' equity.......................................................................... $8,134,000
On April 15, 2017, the market price of BSC common shares was $17 per share. Assume BSC declared a 10% stock on this date and distributed the stock on April 30.
Requirements
1. Journalize the declaration and of the stock Prepare the shareholders' equity section of the after the stock Why is total shareholders' equity unchanged by the stock Suppose BSC had a cash balance of $540,000 on April 16, 2017. What is the maximum amount of cash dividends BSC can declare?
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