Average Corporation has the following shares outstanding at the end of 2016: Preferred shares, $3, no par

Question:

Average Corporation has the following shares outstanding at the end of 2016:
Preferred shares, $3, no par value; 8,000 outstanding shares
Common shares, no par value; 30,000 outstanding shares
On October 1, 2017, the board of directors declared dividends as follows:
Preferred shares: Full dividend amount, payable December 20, 2017
Common shares: 10 percent common stock dividend (i.e., one additional share for each 10 held), issue able December 20, 2017
On December 20, 2017, the market prices were $50 per preferred share and $32 per common share.

Required:
Explain the effect of each of the dividends on the assets, liabilities, and shareholders' equity of the company at each of the specified dates.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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