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 $105 per share, and 64,000 shares of the common stock were sold for $19 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

Stockholder's equity

Paid in Capital
Preferred stock	250000
Paid in capital in excess of par value-Preferred stock	12500
Common Stock	128000
Paid in Capital in excess of par value-Common Stock	1088000
Total paid in capital		1478500
Retained earnings		382000
Total Stockholder's equity		1860500