Spring Company is authorized to issue 500,000 shares of $1 par value common stock. In its first year, the company has the following transactions: Mar. 1 Issued 40,000 shares of stock at $9.75 per share Apr. 10 Issued 1,000 shares of stock for legal services valued at $10,000. Oct. 3 Purchased 1,000 shares of treasury stock at $9 per share Journalize the transactions and calculate how many shares of stock are outstanding at August 3.

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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.