When Resisto Systems, Inc., was formed, the company was authorized to issue 5,00

Question

When Resisto Systems, Inc., was formed, the company was authorized to issue 5,000 shares of $100 par value, 8 percent cumulative preferred stock, and 100,000 shares of $2 stated value common stock. Half of the preferred stock was issued at a price of $104 per share, and 64,000 shares of the common stock were sold for $24 per share. At the end of the current year, Resisto has retained earnings of $382,000. a. Prepare the stockholders' equity section of the company's balance sheet at the end of the current year Stockholders' Equity Common stock Cumulative preferred stock 250,000 Additional paid-in capital Total paid-in capital Retained earnings $250,000 382,000 Total stockholders' equity $632,000

Explanation / Answer

Stockholders Equity Cumulative preferred stock 250000 Common stock 128000 Additional paid in capital: preferred stock 10000 Common stock 1408000 Total paid in capital 1796000 Retained earnings 382000 total stockholders Equity 2178000 preferred 2500*100= 250,000 addittional 2500*4= 10,000 common stock 64000*2= 128000 Additional 64000*22 1408000

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