The shareholders' equity for Pondwood, Inc. on December 31, 2014, follows:

Shareholders' Equity

Share Capital:

Common Shares, 350,000 shares authorized,

40,000 issued and outstanding ......................................$200,000

Total Share Capital ......................................................200,000

Retained Earnings ......................................................360,000

Total Shareholders' Equity ..........................................$560,000

On September 30, 2015, the market price of Pondwood's common shares 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 shareholders' equity section of the Pondwood, Inc. statement of financial position after the stock dividend.