When applying dividends to outstanding stock, does that include stock in the treasury, since it is still issued stock? Also, what is the difference between par stock and non par stock? I doesn't have anything to do with preferred and common stock, right?

No; Treasury stock should not receive dividends.

Par Stock is valued using its Par Value. Non Par is valued based on how much you sold it for. Preferred and common stock are different issues. ;)

As an added note, treasury stock isn't outstanding. Yes, it's still issued because the stock still exists. But outstanding is what the company is not holding itself, so treasury stock isn't outstanding.

Par stock is not "valued" using its par. There isn't any "value" about it. The par is "legal capital," i.e. the amount that cannot be given out as dividends. It's value could be anything. That may have been a "value" when it was first issued, but as time goes by its value changes. Think of the companies with penny par. Is its value only a penny? Non par simply means it has no par. It might have a stated value instead which can be used the same way par is used.

So if you were to buy par stock, you would pay the current value, but the company would record it at the par value?

The company would record it at the price paid for it, but it's split up between the par and the amount over par. (Assuming it has a par or stated value.) If you ever see something like "additional paid-in (contributed) capital" or something like that on there, that may partially be what that is -- the extra over par it was sold for. So it's just split up is all. They can't not record money they get, and the total equity is still there. (Additional paid-in capital can come from selling treasury stock over cost also.)

This is all assuming, of course, that you're buying newly issued stock.

Can dividends be paid out of additional paid in capital?

No, dividends are paid out of income earned during the year.

Additional Paid-In Capital is the difference between the par value or stated value of a stock and the purchase price of stock that is purchased by an investor. For example I buy one share of common stock of a company for $100 and the par value is $5, then the journal entry by the company will be: Debit Cash for 100 (the amount of cash received, Credit Common Stock for 5 (par value) and Credit Additional Paid-in Capital - Common for 95 (the difference). Stock and Additional Paid-in capital is not affected by a cash dividends at all!!