Average Corporation has the following shares outstanding at the end of 2010:

Preferred shares, \(\$ 4\), no par value; 8,000 outstanding shares.


Common shares, no par value; 30,000 outstanding shares.

On October 1, 2011, the board of directors declared dividends as follows:

Preferred shares: Full dividend amount, payable December 20, 2011.

Common shares: 10 percent common stock dividend (i.e., one additional share for each 10 held), issuable December 20, 2011.

On December 20, 2011, the market prices were \(\$ 50\) per preferred share and \(\$ 32\) per common share.

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