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Shelby Corporation was organized in January 2010 by 10 stockholders to operate an air conditioning sales and service business. The charter issued by the state authorized the following capital stock: |
| Common stock, $1 par value, 200,000 shares. |
| Preferred stock, $8 par value, 6 percent, 50,000 shares. |
| During January and February 2010, the following stock transactions were completed: |
| a. | Collected $40,000 cash from each of the 10 organizers and issued 2,000 shares of common stock to each of them. |
| b. | Issued 15,000 shares of preferred stock at $25 per share; collected in cash. |
| Net income for 2010 was $40,000; cash dividends declared and paid at year end were $10,000. |
Prepare the stockholders’ equity section of the balance sheet at December 31, 2010
| Contributed capital: | |
| Preferred stock | $ |
| Additional paid in capital, preferred stock | |
| Common stock | |
| Additional paid in capital, common stock | |
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| Total contributed capital | |
| Retained earnings | |
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| Total stockholders’ equity |