The stockholders’ equity for Perfect Desserts Drive-Ins (PD) on December 31, 2012, follows:On July 13, 2013, the market price of PD common stock was $17 per share. Assume PD distributed a 25% stock dividend on this date.Requirements1. Journalize the 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 PD had a cash balance of $600,000 on July 14, 2013. What is the maximum amount of cash dividends PD candeclare?
The stockholders equity for Perfect Desserts Drive Ins PD on