Dentquity Corporation has the following capital structure at the beginning of the current year:

Required
a. Prepare the journal entries (including closing entries) to record each of the following transactions affecting shareholders€™ equity during the current year. There are separate accounts for dividends payable for common stock and preferred stock. Assume there are no preferred dividends in arrears.
€¢ Dentquity declared a total cash dividend of $ 880,000 on common and preferred stock. €¢ Net income for the year was $ 40,000.
b. Prepare the stockholders€™ equity section of the balance sheet at the end of the current year.

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8% Preferred stock, $10 par value, 520,000 shares authorized, issued and outstanding $ 5,200,000 Common stock, $4 par value, 1,870,000 shares authonized, 625,000 shares issued and outstanding Additional paid-in capital in excess of par-common Total contributed capital Retained earnings Total stockholders equity 2,500,000 4,000,000 $11,700,000 912,050 $12,612,050