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 |
|
|
|
| Total contributed capital |
|
| Retained earnings |
|
|
|
| Total stockholders' equity |