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fari File Edit View History Bookmarks Window Help ezto.mheduca YouTube Chapter 11 HW E11-3 Preparing the Stockholders Equity Section of the Balance Sheet [L 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 Total Contributed Capital Total Stockholders' Equity 0 29

Explanation / Answer

common stock (35,000+2500 shares)*$1= 37500 paid in capital in excess (35000*19 +2500*24)= 725000 Preferred Stock (10,000+1000)*10par value= 110000 paid in capital in excess (10000*11+1000*11)= 121000 Balance Sheet (partial) At December 31 Stockholder's Equity Contributed capital Preferred stock 8%,par $10,authorised 20,000 shares ,11000 shares issued            110,000 Addittional paid in capital ,preferred stock            121,000 Common stock $1 par ,authorized 50,000 shares ,37500 issed and outstanding              37,500 Addittional paid in capital ,common stock            725,000 Total contributed capital            993,500 Retained earnings              43,000 total Stockholders Equity        1,036,500

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