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 35,000 shares of the common stock for $20 per share.Issued 10,000 shares of the preferred stock at $21 per share.Issued 2,500 shares of the common stock at $25 per share and 1,000 shares of the preferred stock at $21.Net income for the first year was $43,000, but no dividends were declared.Required:Prepare the stockholders’ equity section of the balance sheet at December 31.

North Wind Aviation Stockholders' Equity Section of Balance Sheet December'31 Preferred Stock (11,000 shares of $ 10 par value) $ 110,000 Additional Paid in capital, Preferred stock $ 121,000 Common Stock (37,500 shares of $ 1 par value) $ 37,500 Additional Paid in capital, Common stock $ 725,000 Reserves and Surplus $ 43,000 Total Stockholders' Equity $1,036,500 Sno. Transaction Preferred Stock Common Stock Additional Paid-in Capital, Preferred Stock Additional Paid-in Capital, Common Stock Reserves and Surplus 1 Issued a total of 35,000 shares of the common stock for $20 per share. $ 35,000 $ 665,000 2 Issued 10,000 shares of the preferred stock at $21 per share. $ 100,000 $ 110,000 3 Issued 2,500 shares of the common stock at $25 per share and 1,000 shares of the preferred stock at $21. $ 10,000 $ 2,500 $ 11,000 $ 60,000 4 Net income for the first year was $43,000, but no dividends were declared. $ 43,000 Closing Balances $ 110,000 $ 37,500 $ 121,000 $ 725,000 $ 43,000

Answered: North Wind Aviation received its…

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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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 35,000 shares of the common stock for $20 per share.
Issued 10,000 shares of the preferred stock at $21 per share.
Issued 2,500 shares of the common stock at $25 per share and 1,000 shares of the preferred stock at $21.
Net income for the first year was $43,000, but no dividends were declared.

Required:

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

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