North Wind Aviation received its charter dunng January authorizing the following

ID: 2478283 • Letter: N

Question

North Wind Aviation received its charter dunng January authorizing the following capital stock: Preferred stock: 8 percent, par dollar 10, authorized 20,000 shares. Common stock: par dollar 1, authorized 60,000 shares. The following transactions occurred during the first year of operations in the order given: Issued a total of 48,000 shares of the common stock for dollar 12 per share. Issued 12,000 shares of the preferred stock at dollar 13 per share. Issued 3,800 shares of the common stock at dollar 17 per share and 1, 200 shares of the preferred stock at dollar 13 Net income for the first year was dollar 56,000. Required: Prepare the stockholders prime equity section of the balance sheet at December 31.

Explanation / Answer

Contributed capital

Preferred stock , 8%, $10 par ,20,000 shares authorized ,13,200 shares issued and outstanding

$132,000

Additional paid in capital – Preferred

39,600

Common stock , $1 par ,50,000 shares authorized 51,800 shares issued and outstanding

51,800

Additional paid in capital - common

588,800

Total contributed capital

812,200

Retained earnings

56,000

Total stockholder’s Equity

$868,200