LO 6 Exercise 8-13 Cash dividends: common and preferred stock Varsity Corp. had the following stock issued and outstanding at January 1, 2012 1. 200,000 shares of no-par common stock. 2. 10,000 shares of $100 par, 8 percent, cumulative preferred stock. (Dividends are in arrears for one year, 2011.) On February 1, 2012, Varsity declared a $200,000 cash dividend to be paid March 31 to shareholders of record on March 10. Required What amount of dividends will be paid to the preferred shareholders versus the common shareholders? LO 7 Exercise 8-14 Accounting for stock dividends Rollins Corporation issued a 5 percent stock dividend on 10,000 shares of its $10 par common stock. At the time of the dividend, the market value of the stock was $14 per share. Required a. Compute the amount of the stock dividend. b. Show the effects of the stock dividend on the financial statements using a horizontal state- ments model like the following one. Assets = Liab. + Com. Stk. + PIC in Excess + Ret. Earn. Rev. - Exp. = Net Inc. Cash Flow