Conversion of Preferred Stock into Common Stock Los Altos, Inc., has stock outstanding. 33,000 shares of $100 par value, 6% preferred stock and 220,000 shares of $.50 par value common stock outstanding, The preferred stock is convertible into the company's common stock at a conversion rate of 1-to- 20; that is, each share of preferred stock is convertible into 20 shares of common stock. The preferred stock had been sold for its par value when issued. Determine the financial statement effects of the conversion of all of the company's preferred stock into common stock. Balance Sheet Assets Liabilities 4 Equity Preferred stock + Common Stock - Paid-in Capital in Excess of Par Valu 012 3,300,000 X 3,300,000 X 0 0 Check