Chapter 11, Problem 11.3E

Preparing the Stockholders' Equity Section of the Balance Sheet

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:

1. a. Issued a total of 40,000 shares of the common stock for $15 per share.
2. b. Issued 10,000 shares of the preferred stock at $16 per share.
3. c. Issued 3,000 shares of the common stock at $20 per share and 1,000 shares of the preferred stock at $16.
4. d. Net income for the first year was $48,000.

Required:

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