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    Changes in Stockholders' equity-Mountain Air Ski Resorts Inc

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    Listed are the equity sections of balance sheets for
    years 2008 and 2009 as reported by Mountain Air Ski Resorts, Inc. The overall
    value of stockholders' equity has risen from $2,000,000 to $7,500,000. Use the
    statements to discover how and why this happened.

    Mountain Air Ski Resorts, Inc.
    Balance Sheets (partial)
    Stockholders' equity 2008 2009
    Common stock ($1.00 par)
    Authorized--5,000,000 shares
    Outstanding--1,500,000 shares 2009 $1,500,000
    --500,000 shares 2008 $ 500,000
    Paid-in capital in excess of par 500,000 4,500,000
    Retained earnings 1,000,000 1,500,000

    Total stockholders' equity $2,000,000 $7,500,000

    The company paid total dividends of $200,000 during fiscal 2009.

    a. What was Mountain Air's net income for fiscal 2009?
    b. How many new shares did the corporation issue and sell during the year?
    c. At what average price per share did the new stock sold during 2009 sell?
    d. At what price per share did Mountain Air's original 500,000 shares sell?

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    Solution Summary

    Excel template shows the student how to figure out what made all the changes from beginning to ending balances in each of the shareholders' equity accounts. Formulas are in cells for inspections.