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Changes in Stockholders' equity-Mountain Air Ski Resorts Inc

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?

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.

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