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 common stock.
Half of the preferred stock was issued at a price of $103 per share, and 70,000 shares of common stock were sold for $13 per share. At the end of the current year, Resisto had retained earnings of $382,000.
a. Prepare the stockholder's equity section of the company's balance sheet at the end of the current year.
b. Assume Resisto Systems common stock is totaling $24 per share and its preferred stock is trading at $107 per share at the end of the current year. Would the stockholder's equity section prepared in part a be affected by this additional information?