North Wind Aviation received its charter during January authorizing the followin

Question

North Wind Aviation received its charter during January authorizing the following capital stock: Preferred stock: 8 percent, par $10, authorized 20,000 shares. Common stock: par $1, authorized 50,000 shares The following transactions occurred during the first year of operations in the order given a. Issued a total of 35,000 shares of the common stock for $20 per share. b. Issued 10,000 shares of the preferred stock at $21 per share c. Issued 2,500 shares of the common stock at $25 per share and 1,000 shares of the preferred stock at $21 d. Net income for the first year was $43,000 Required: Prepare the stockholders' equity section of the balance sheet at December 31. NORTH WIND AVIATION Balance Sheet (Partial) At December 31 Stockholders' Equity Contributed Capital $ 37,500 110,000 Common Stock Preferred Stock Additional Paid-in Capital, Common Stock Additional Paid-in Capital, Preferred Stock Total Contributed Capital 147,500 etained Earnings Total Stockholders' Equity $ 147,500

Explanation / Answer

Stockholders' equity Contributed capital: Common Stock 37500 Preferred stock 110000 Additional paid in capital, Common Stock 725000 Additional paid in capital, Preferred Stock 121000 Total Contributed capital 993500 Retained earnings 43000 Total Stockholders' equity 1036500

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