Question

orth Wind Aviation received its charter during January authorizing the following capital stock: Preferred stock: 8...

orth 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:

  1. Issued a total of 49,000 shares of the common stock for $11 per share.
  2. Issued 10,000 shares of the preferred stock at $12 per share.
  3. Issued 3,900 shares of the common stock at $16 per share and 1,000 shares of the preferred stock at $12.
  4. Net income for the first year was $57,000, but no dividends were declared.


Required:

Prepare the stockholders’ equity section of the balance sheet at December 31.

Homework Answers

Answer #1
WIND AVIATION
Balance Sheet(Partial)
At December 31
Stockholders Equity
Contributed Capital:
Common stock,$1 par 60,000 authorized,52,900 issued $52,900
Preferred stock,$10 par 20,000 authorized,11,000 issued $1,10,000
Paid in capital in excess of Par - Common Stock($490,000+$58,500) $5,48,500
Paid in capital in excess of Par - Preferred Stock($20,000+$2,000) $22,000
Total Contributed capital $7,33,400
Retained earnings $57,000
Total Stockholders Equity $7,90,400
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