Question

Chapter 11 Chapter 11 Homework Saved Micros Update 13 Shelby Corporation was organized in January to operate an air-conditioning sales and service business. The charter issued by the state authorized the following capital stock 0.55 points Common stock, $1 par value, 200,000 shares. Preferred stock, $10 par value, 6 percent, 50,000 shares. During January and February, the following stock transactions were completed: a. Collected $400,000 cash and issued 20,000 shares of common stock. b. Issued 15,000 shares of preferred stock at $30 per share; collected in cash. Print Net Income for the year was $50,000; cash dividends declared and paid at year-end were $10,000. References Required: Prepare the stockholders' equity section of the balance sheet at December 31. SHELBY CORPORATION Balance Sheet (Partial) At December 31 Stockholders' Equity Contributed Capital: Total Contributed Capital

Answer 1

Stockholders Equity section of the balance sheet is as prepared below:

Shelby Corporation
Balance Sheet (Partial)
At December 31
Contributed Capital:
Common Stock $1 par value 200,000 shares authorized
20,000 shares issued	20,000
Preferred Stock $10 par value, 6 percent 50,000 shares authorized
15,000 shares issued	150,000
Additional paid in capital
Paid in Capital in excess of Par-Common stock	380,000
Paid in Capital in excess of Par-Preferred stock	300,000
Total contributed capital	850,000
Retained earnings (50,000-10,000)	40,000
Total stockholders equity	890,000