E11-3 Preparing the Stockholders Equity Section of the Balance Sheet [LO 11-2, L
ID: 2526964 • Letter: E
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 60,000 shares. The following transactions occurred during the first year of operations in the order given: a. Issued a total of 47,000 shares of the common stock for $13 per share. b. Issued 11,000 shares of the preferred stock at $14 per share. c. Issued 3,700 shares of the common stock at $18 per share and 1,100 shares of the preferred stock at $14. d. Net income for the first year was $55,000. Required: NORTH WIND AVIATION Balance Sheet (Partial) At December 31 Stockholders' Equity Contributed Capital: Total Contributed Capital Total Stockholders' EquityExplanation / Answer
NORTH WIND AVIATION
Balance Sheet (Partial)
At December 31
Stockholders’ Equity
Contributed capital:
Preferred stock
$1,21,000
Additional paid-in capital, preferred stock
$48,400
Common stock
$50,700
Additional paid-in capital, common stock
$6,26,900
Total contributed capital
$8,47,000
Retained earnings
$55,000
Total stockholders' equity
$9,02,000
Preferred stock = (11000 x $10) + (1100 x $10 ) = $1,21,000
Additional paid-in capital, preferred stock = (11000 x $4) + (1100 x $4 ) = $48400
Common stock = (47000 x $1) + (3700 x $1) = $50,700
Additional paid-in capital, common stock=(47000 x $12) + (3700 x $17)=$626900
Retained earnings = $55,000
Contributed capital:
Preferred stock
$1,21,000
Additional paid-in capital, preferred stock
$48,400
Common stock
$50,700
Additional paid-in capital, common stock
$6,26,900
Total contributed capital
$8,47,000
Retained earnings
$55,000
Total stockholders' equity
$9,02,000
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