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# Changes in Stockholder Equity

Attached are the equity sections of the balance sheets for the years 2008 and 2009 reported by MASR Inc. The overall value of stockholder equity has risen from \$2,000,000 to \$7,500,000. Use the attached statement to discover why this happened:

The company paid dividends of \$200,000 during fiscal 2009.
a)What was MA's net income for fiscal 2009?
b)How many new shares did the corp. issue and sell during the year?
c)At what average price per share did the new stock during 2009 sell?
d)At what price per share did MA's original 500,000 shares sell?

Mountain Air Ski Resorts, Inc.
Balance Sheet

Stockholder's Equity 2008 2009

Common Stock (\$1.00 par)
Authorized-5,000,000 shares
Outstanding-1,500,000 shares 2009 \$1,500,000
Outstanding-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

#### Solution Preview

a)What was MA's net income for fiscal 2009?

We use the equation
Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends
1,500,000 = 1,000,000 + Net Income - 200,000
Net Income = 700,000

b)How many new shares did the corp. issue and sell during the year?

The change in the ...

#### Solution Summary

The solution explains various calculations relating to stockholders equity

\$2.19