Sheffield Company has the following stockholders’ equity accounts at December 31, 2020. Common Stock ($100 par value, authorized 8,700 shares)   $502,800 Retained Earnings   277,400 Prepare entries in journal form to record the following transactions, which took place during 2021 (1)   260 shares of outstanding stock were purchased at $97 per share. (These are to be accounted for using the cost method.) (2)   A $20 per share cash dividend was declared. (3)   The dividend declared in (2) above was paid. (4)   The treasury shares purchased in (1) above were resold at $103 per share. (5)   480 shares of outstanding stock were purchased at $106 per share. (6)   370 of the shares purchased in (5) above were resold at $96 per share.

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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.