Konzo's Boating Corporation makes specialty sailboats in Ontario. The shareholders' equity accounts, with balances on April 1, 2015, the beginning of the fiscal year, are as follows:

$2.80 preferred shares (700,000 shares authorized,

150,000 shares issued and outstanding) . . . . . . . . . . . . . . . . . . $ 5,250,000

Common shares (unlimited shares authorized,

1,250,000 shares issued and outstanding) . . . . . . . . . . . . . . . . . 18,750,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,040,000

Selected transactions completed by Konzo's Boating Corporation during the current fiscal year are as follows:

May 1. Declared semiannual dividends on the preferred shares and $0.26 on the common shares to shareholders of record on May 15, payable on June 1. Konzo's Boating does not use a cash dividends account.

Jun. 1. Paid the cash dividends.

Aug. 5. Issued an additional 34,000 preferred shares at $37 per share.

Sep. 10. Issued an additional 20,000 common shares at $13 per share.

Nov. 15. Declared semiannual dividends on the preferred shares and $0.30 on the common shares to shareholders of record on November 30, payable December 31.

Dec. 31. Paid the cash dividends.

Mar. 31. Recorded the closing entry for the income for the year of $2,950,000.

Instructions

1. Journalize the transactions.

2. Prepare the statement of retained earnings for the year ended March 31, 2016.

3. Prepare the shareholders' equity section of the balance sheet as at March 31, 2016.