The equity section of the December 31, 2019, balance sheet for Delicious Alternative Desserts Inc. showed the following:

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?Delicious Alternative Desserts Inc.? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?Equity Section of the Balance Sheet? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? December 31, 2019Contributed capital:Preferred shares, $0.40 cumulative; 80,000 shares authorized;60,000 shares issued and outstanding ......................................... $240,000Common shares; 250,000 shares authorized;120,000 shares issued and outstanding ......................................... 192,000Total contributed capital ................................................................ $432,000Retained earnings ............................................................................. 148,000Total equity ...................................................................................... $580,000

During the year 2020, the company had the following transactions affecting equity accounts:

The board of directors had not declared dividends for the past two years (2019 and 2020).

Required

1. Journalize the above transactions.

2. Prepare the equity section as at December 31, 2020.

3. How many preferred shares are available for issue at December 31, 2020?

4. How many common shares are available for issue at December 31, 2020?

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Sold 20,000 common shares for a total of $34,400 cash. Sold 5,000 preferred shares at $4.80 each; cash. 15 Exchanged 7,000 common shares for equipment with a fair market value of $26,000. The last common share trade was dated March 15 at $4.88. 31 Jan. Mar. June Closed the Income Summary account, which showed a credit balance of $280,000. Dec.