Common Stock what it is and how to record it
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How do you calculate shareholders equity?
Stockholders' equity can be calculated by subtracting the total liabilities of a business from total assets or as the sum of share capital and retained earnings minus treasury shares.What are some examples of stockholders equity?
The most common stockholders' equity accounts are as follows:
Common stock. ...
Additional paid-in capital on common stock. ...
Preferred stock. ...
Additional paid-in capital on preferred stock. ...
Retained earnings. ...
Treasury stock.What is stockholder equity made up of?
Four components that are included in the shareholders' equity calculation are outstanding shares, additional paid-in capital, retained earnings, and treasury stock. If shareholders' equity is positive, a company has enough assets to pay its liabilities; if it's negative, a company's liabilities surpass its assets.
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