Stanley Company has just started its business in year 2005. The company needed funds to finance its long-term needs. Following detail about the company are mentioned: The management decided to have an authorization of 6,000,000 shares having a par value of $8 each of common stock and $5 par value, 2,000,000 preferred stock. The company hired an investment banker for the IPO in 2005. With the help of the investment banker the company was able to issue 500,000 common shares at a price of $11 per share while 50,000 shares of preferred stock were issued at $20 each. Due to spike in prices, and a good reputation the company was able to issue 400,000 further common stock at a price of $15 per share in year 2006. However, 2007 was not a good year, due to economic crises and political instability, the market price of the shares dropped to $12 per share. The company repurchased 80,000 shares. Again, during 2008 the share price of common stock rose to 14 per share and the company sold 45,000 treasury shares.

From year 2005 to 2009 (five years), the company reported net income of $ 200,000 in Year 2005, $ 300,000 in 2006, $500,000 in 2007, $240,000 in 2008 and $520,000 in year 2009. Dividends of 50 cents per share each year on the common stock outstanding is paid each year.

Required:

Prepare the Stockholder’s Equity Section at the end of year 2009, when

a. The Preferred stock dividend is cumulative.

b. The Preferred Stock dividend is non-cumulative.