Banner Publications was organized early in 2008 with authorization to issue 10,000 preference shares of $100 par value and 1 million ordinary shares of $1 par value. All the preference shares were issued at par, and 400,000 ordinary shares were sold for $15 per share. The preference shares pay a 10 percent noncumulative dividend.

During the first five years of operations (2008 through 2012) the corporation earned a total of $4,100,000 and paid dividends of $.80 per share each year on the ordinary shares. In 2013, however, the corporation reported a loss of $1,100,000 and paid no dividends.

a.

Prepare the shareholders equity section of the statement of financial position at 31 December 2013. Include a supporting schedule showing your computation of retained earnings at end of reporting period. (Hint: Income increases retained earnings, whereas dividends and losses decrease retained earnings.) (Input all amounts as positive values. Omit the "$" sign in your response.)

BANNER PUBLICATIONS
Partial Statement of Financial Position
December 31, 2013
Shareholders' equity:
(Click to select)Noncumulative Preference sharesManufacturing overheadRental equipmentRetained earningsSalaries payable			$
(Click to select)Retained earningsPreference sharesSelling and administrative expensesOrdinary sharesSalaries payable
(Click to select)Cost of goods soldUtilities expenseShare premium: ordinary sharesWork in process inventoryAdditional paid-in capital: Preference shares
Total paid-in capital			$
Retained earnings
(Click to select)LossProfit			$
(Click to select)Rental equipmentLess: Preference share dividendsAdd: Ordinary share dividendsAdd: Preference share dividendsLess: Ordinary share dividends	$
(Click to select)Rental equipmentLess: Ordinary share dividendsLess: Preference share dividendsAdd: Preference share dividendsAdd: Ordinary share dividends
Retained earnings, December 2012			$
(Click to select)Less: LossAdd: Profit of 2013
Retained earnings, December 31, 2013			$
Total shareholders' equity			$