At 1 Jul 20X4 a company’s capital and share premium account of a company were as follows: Ordinary share capital $75,000 (300,000 shares of 25c each) Share premium account $200,000 In the year ended 30 June 20X5 the following event took place: 1.On 1 January 20X5 the company made a rights issue of 1 share for every 5 held at $1.20 per share 2.On 1 April 20X5 the company made a bonus issue of 1 share for every 3 in issue at that time, using the share premium account to do so. What are the correct balance on the company’s capital and share premium account at 30 June 20X5? Ordinary share capital   Share premium account A $120,000                            $227,000 B $120,000                            $137,000 C $460,000                            $287,000 D $480,000                            $137,000

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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.