P3–11 Changes in stockholders’ equity Listed are the equity sections of balance sheets for years 2014 and 2015 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 that happened.

The company paid total dividends of $200,000 during fiscal 2015.

a. What was Mountain Air’s net income for fiscal 2015?

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 2015 sell?

d. At what price per share did Mountain Air’s original 500,000 shares sell?

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Stockholders' equity Mountain Air Ski Resorts, Inc. Balance Sheets (partial) 2014 2015 Common stock ($1.00 par) Authorized: 5,000,000 shares Outstanding: 1,500,000 shares 2015 $1,500,000 500,000 shares 2014 $ 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