E11-3 (Algo) 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:Issued a total of 41,000 shares of the common stock for $16 per share.Issued 11,000 shares of the preferred stock at $17 per share.Issued 3,100 shares of the common stock at $21 per share and 1,100 shares of the preferred stock at $17.Net income for the first year was $49,000, but no dividends were declared. NORTH WIND AVIATIONBalance Sheet (Partial)At December 31Stockholders' EquityContributed Capital:Common Stock24656,000 XAdditional Paid-In Capital, Common Stock65,100 XPreferred Stock187,000 XAdditional Paid-In Capital, Preferred Stock18,700 XTotal Contributed Capital926,800Retained Earnings49,000Total Stockholders' Equity$975,800%24

Additional paid in capital, preferred stock = 11000 shares×($17-$10)+ 1100 shares×($17-$10)…

Answered: 11-2, LO 11-4] North Wind Aviation…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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E11-3 (Algo) 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:

Issued a total of 41,000 shares of the common stock for $16 per share.
Issued 11,000 shares of the preferred stock at $17 per share.
Issued 3,100 shares of the common stock at $21 per share and 1,100 shares of the preferred stock at $17.
Net income for the first year was $49,000, but no dividends were declared.

NORTH WIND AVIATION
Balance Sheet (Partial)
At December 31
Stockholders' Equity
Contributed Capital:
Common Stock
24
656,000 X
Additional Paid-In Capital, Common Stock
65,100 X
Preferred Stock
187,000 X
Additional Paid-In Capital, Preferred Stock
18,700 X
Total Contributed Capital
926,800
Retained Earnings
49,000
Total Stockholders' Equity
$
975,800
%24

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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