Listed are the equity sections of balance sheets for years 2011 and 2012 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.

The company paid total dividends of $200,000 during fiscal 2012.
a. What was Mountain Air€™s net income for fiscal 2012?
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 2012 sell?
d. At what price per share did Mountain Air€™s original 500,000 sharessell?

Transcribed Image Text:

Mountain Air Ski Resorts, Inc. Balance Sheets (partial) Stockholders' equity Common stock ($1.00 par) 2011 2012 Authorized-5,000,000 shares Outstanding-1,500,000 shares 2012 $1,500,000 -500,000 shares 2011 $500,000 Paid-in capital in excess of par Retained earnings 500,000 4,500,000 1,000,000 1.500,000 $2,000,000$7 500,000 Total stockholders' equity