Fortuna Company is authorized to issue 1,000,000 shares of $1 par value common stock. In its first year, the company has the following transactions: Jan. 31 Issued 40,000 shares at $10 share Jun. 10 Issued 100,000 shares in exchange for land with a clearly determined value of $850,000 Aug. 3 Purchased 10,000 shares of treasury stock at $9 per share Journalize the transactions and calculate how many shares of stock are outstanding at August 3. Nutritious Pet Food Company’s board of directors declares a cash dividend of $1.00 per common share on November 12. On this date, the company has issued 12,000 shares but 2,000 shares are held as treasury shares. What is the journal entry to record the declaration of this dividend?   Jesse and Mason Fabricating, Inc. general ledger has the following account balances at the end of the year:

Q: Instructions: prepare the journal entries on above transactions.

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A: Total cash received on Jan. 10 = No. of shares issued x pr value per share = 65000 x $5 = $325,000

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A: Journal entry for issue of shares:

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A: Retained earnings = Net Income - Dividend paid = $60,000 - $30,000 = $30,000

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.