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 30,000 shares of the common stock for $10 per share. b. Issued 12,000 shares of the preferred stock at $11 per share. c. Issued 2,000 shares of the common stock at $15 per share and 1,200 shares of the preferred stock at $11. d. Net income for the first year was $38,000. 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 Capital, Common Stock Preferred Stock Additional Paid-in Capital, Preferred Stock Total Contributed Capital Retained Earnings Total Stockholders' Equity

Explanation / Answer

Stockholder's equity :

Contributed capital Common Stock 32000 Additional paid in capital-Common Stock 298000 Preferred Stock 132000 Additional paid in capital-Preferred Stock 13200 Total Contributed capital 475200 Retained earnings 38000 Total Stockholder's equity 855200

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