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:

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.

Answer 1

Shareholder's Equity for Dec.31 Paid in capital $ 52,900 Common stock, 53,900 Issued at Pasvalue $1 8% Prefesred stock, 11,000 shares issued @ $10 1. (A) Additional paid in capital - a $110,000 $162,900 in Excess of Pas - 84. Poeferred stock = = an excess of Pais - common stock CB) $548,000 $R2,000 $570, 500 Retained Earnings Cs) - $59,000 Total shade holdeos Equity CA4B*} $ 733,400 (+) $57,000 790,400 - Total stock holdeos Equity : $790, 400