The shareholders' equity section of the statement of financial position of ABC Co. contains the following: Ordinary share capital, P10 par, 5,000,000 shares P30,000,000 Ordinary share premium 3,000,000 10% Preference share capital, P70 par, 500.000 shares 10,500,000 Preference shares premium 6,000,000 Retained Earnings 7,500,000 On November 15, 2022, 55,000 preference shares were converted to 8 ordinary shares per preference share. On November 15, 2022, there was an entry on   A.Retained Earnings -1,650,000 B.Paid-In Capital -Conversion of Preference into Ordinary Shares-1,650,000 C.Paid in Capital from Donated Shares-1,650,000 D.Paid in Capital from Retirement of Preference Share-1,650,000 E.Paid in Capital from Sale of Treasury Share-1,650,000

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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.