E11-3 Preparing the Stockholders Equity Section of the Balance Sheet [LO 11-2, L

Question

E11-3 Preparing the Stockholders Equity Section of the Balance Sheet [LO 11-2, LO 11-4] 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 45,000 shares of the common stock for $20 per share. b. Issued 12,000 shares of the preferred stock at $21 per share c. Issued 3,500 shares of the common stock at $25 per share and 1,200 shares of the preferred stock at $21. d. Net income for the first year was $53,000 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: Common Stock Additional Paid-in Capit Preferred Stock Additional Paid-in Capital, Common Stock anit This is a numeric cell, so please enter numbers only Total Contributed Capital 0

Explanation / Answer

NORTH WIND AVIATION

Ballance Sheet [Partial]

At December 31

Stock holders's Equity

Contributed Capital : Preferred Stock , 8 % , $10 par , 20,000 authorized 13,200 shares issued & outstanding 132,000 Additional Paid in Capital , Preferred [ 13,200 * ($21 - $10) ] 145,200 Common Stock , $1 par , 50,000 authorized 48,500 shares issued & outstanding 485,000 Additional Paid in Capital , Common [ 45,000 * ($20 - $1) + 3,500 ($25-$1) ] 939,000 Total Contributed Capital 1,701,200 Retained Earnings 53,000 Total Shareholder's Equity $1,754,200

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