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 66,000 shares of the common stock were sold for $20 per share. At the end of the current year, Resisto has retained earnings of $382,000.

Prepare the stockholders

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 66,000 shares of the common stock were sold for $20 per share. At the end of the current year, Resisto has retained earnings of $382,000.

Explanation / Answer

66,000 common shares at $2 par = $132,000, sold for $20 = $1320,000, difference of $1188000

2,500 preferred shares at $100 par value = $250,000, sold for $104 = $2,60,000, difference of $10000

So:

Common Stock = $132,000
Preferred Stock = $250,000

Additional paid in capital - common = $1188000
Additional paid in capital - preferred = $10000

Total paid in capital = $1,580,000

Retained earnings = $382,000

Stockholder's equity = $1,962,000

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.