Shelby Corporation was organized in January to operate an air-conditioning sales

Question

Shelby Corporation was organized in January to operate an air-conditioning sales and service business. The charter issued by the state authorized the following capital stock: Common stock, $1 par value, 200,000 shares. Preferred stock, $10 par value, 6 percent, 50,000 shares. During January and February, the following stock transactions were completed: a. Collected $484,000 cash and issued 22,000 shares of common stock. b. Issued 16,000 shares of preferred stock at $32 per share; collected in cash. Net income for the year was $52,000; cash dividends declared and paid at year-end were $12,000. Required: Prepare the stockholders' equity section of the balance sheet at December 31 SHELBY CORPORATION Balance Sheet (Partial) At December 31 Stockholders' Equity Contributed Capital: Total Contributed Capital 0) Total Stockholdars FOit

Explanation / Answer

Stockholder's equity section :

Contributed capital Common stock 22000 Paid in capital in excess of par value- common stock 462000 Preferred stock 160000 Paid in capital in excess of par value- preferred stock 352000 Total contributed capital 996000 Retained earnings 40000 Total stockholder's equity 1036000

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