E12-21 Kelly Groucutt Company reported the following balances at December 31, 2007:

section. common stock $400,000; paid-in capital in excess of par value $100,000; retained earnings

(SO 7) $250,000. During 2008, the following transactions affected stockholder’s equity.

1. Issued preferred stock with a par value of $125,000 for $200,000.

2. Purchased treasury stock (common) for $40,000.

3. Earned net income of $140,000.

4. Declared and paid cash dividends of $56,000.