On June 30, Sharper Corporation’s stockholders' equity section of its balance sheet appears as follows before any stock dividend or split. Sharper declares and immediately distributes a 50% stock dividend.           Common stock—$10 par value, 120,000 shares authorized, 88,000 shares issued and outstanding $ 880,000   Paid-in capital in excess of par value, common stock   390,000   Retained earnings   755,000   Total stockholders’ equity $ 2,025,000       Required:  (1) Prepare the updated stockholders' equity section after the distribution is made. (2) Compute the number of shares outstanding after the distribution is made.

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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.