North Wind Aviation received its charter during January authorizing the followin
ID: 2560739 • Letter: N
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 60,000 shares. The following transactions occurred during the first year of operations in the order given: a. Issued a total of 50,000 shares of the common stock for $10 per share. b. Issued 11,000 shares of the preferred stock at $11 per share. c. Issued 4,000 shares of the common stock at $15 per share and 1,100 shares of the preferred stock at $11. d. Net income for the first year was $58,000. 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' EquityExplanation / Answer
Answer:
North Wind Aviation
Balance sheet (partial)
Stockholders' equity section of the balance sheet at
December 31,
Contributed Capital:
Preferred Stock
121000
Additional Paid-in Capital - Preferred Stock
12100
Common Stock
54,000
Additional Paid-in Capital - Common Stock
506000
Total contributed capital
693,100
Retained Earnings
58000
Total stockholders' equity
751,100
Working Notes:
Additional paid in capital - Common stock
= (50,000 x $9) + (4,000 x $14)
= 506,000
Additional paid in capital - Preffered stock
= (11,000 x $1) + (1,100 x $1)
= $12100
North Wind Aviation
Balance sheet (partial)
Stockholders' equity section of the balance sheet at
December 31,
Contributed Capital:
Preferred Stock
121000
Additional Paid-in Capital - Preferred Stock
12100
Common Stock
54,000
Additional Paid-in Capital - Common Stock
506000
Total contributed capital
693,100
Retained Earnings
58000
Total stockholders' equity
751,100
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