(Learning Objective 2, 4: Preparing the stockholders’ equity section of the balance sheet) Lima Corp. has the following stockholders’ equity information: Lima’s charter authorizes the company to issue 10,000 shares of 5% preferred stock with par value of $100 and 400,000 shares of no par common stock. The company issued 1,000 shares of the preferred stock at $100 per share. It issued 100,000 shares of the common stock for a total of $370,000. The company’s retained earnings balance at the beginning of 20X8 was $40,000, and net income for the year was $90,000. During 20X8, Lima declared the specified dividend on preferred and a $0.50 per share dividend on common. Preferred dividends for 20X7 were in arrears.
Required
Prepare the stockholders’ equity section of Lima Corp.’s balance sheet at December 31, 20X8. Show the computation of all amounts. Journal entries are not required. (pp. 504–505)