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 56,000 shares of the common stock were sold for $17 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.

Answer 1

Answer, with workings

Resisto Systems
Balance Sheet - Partial
at end of Current year
Stockholder's Equity:
Common Stock [56000 shares x $ 2 stated value]	$              112,000
Preferred Stock [2500 shares x $ 100 par]	$              250,000	$             362,000
Paid in Capital in excess of Stated Value - Common Stock [56000 shares x $ 15]	$              840,000
Paid in Capital in excess of Par Value - Preferred Stock [2500 shares x $ 4]	$                10,000	$             850,000
Total Paid in Capital		$         1,212,000
Retained Earnings		$             382,000
Total Stockholder's Equity		$         1,594,000