Accounting for stock dividendsRollins Corporation issued a 5 percent stock dividend on 10,...

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 statements model like the following one.