The stockholders' equity section of the balance sheet for Dairy Heaven Corporation on September 13, 2022, follows:

September 13, 2022, the market price of Dairy Heaven common stock was $20 per share. Dairy Heaven declared and distributed a 9% stock dividend on this date.Read the requirements:

Data table

Stockholders' Equity
Common stock, $0.20 par, 2,100,000 shares
	authorized, 800,000 shares issued	$160,000
Paid-in capital in excess of parcommon		1,722,027
Retained earnings		7,250,000
Accumulated other comprehensive income (loss)		(180,000)
	Total stockholders' equity	$8,952,027

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 Dairy Heaven had a cash balance of $550,000 on September 14, 2022. What is the maximum amount of cash dividends the company can declare?