Common stock, $6 par, 100,000 shares, one vote per share. Preferred stock, 7 percent, par value $10 per share, 5,000 shares, nonvoting.

The following selected transactions were completed during the first year of operations in the order given:

Issued 13,000 shares of the $6 par common stock at $16 cash per share.

Issued 2,300 shares of preferred stock at $20 cash per share.

At the end of the year, the accounts showed net income of $31,000. No dividends were declared.

1. Prepare the stockholders equity section of the balance sheet at December 31.

2. Assume that you are a common stockholder of Geis Incorporated. If the company needed additional capital, would you prefer to have it issue additional common stock or additional preferred stock?