On October 1, Kosko Corporation’s stockholders’ equity is as follows. Common stock, $5 par value $400,000 Paid-in capital in excess of par value     25,000 Retained earnings   155,000 Total stockholders’ equity $580,000 On October 1, Kosko declares and distributes a 10% stock dividend when the market value of the stock is $15 per share. Instructions: Indicate the balances in the above stockholders’ equity accounts after the stock dividend shares have been distributed. Also find the par value per share and book value per share.

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A:

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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.