The stockholders’ equity for Pondwood, Inc., on December 31, 2009, follows:

On September 30, 2010, the market price of Pondwood’s common stock was $11 per share and the company distributed a 30% stock dividend.
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.

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Paid-in Capital: Stockholders' Equity Common Stock, $1 par, 350,000 shares authorized, 40,000 issued and outstanding Paid-in Capital in Excess of Par Total Paid-in Capital Retained Earnings Total Stockholders' Equity $ 40,000 160,000 200,000 360,000 $560,000