Early in 2018, Morty, Inc., was organized with authorization to issue 100,000 shares of $100 par value preferred stock and 300,000 shares of $1 par value common stock. 10,000 shares of the preferred stock were issued at par, and 80,000 shares of common stock were sold at $12 per share. The preferred stock pays a 10 percent cumulative dividend.

During the first four years of operations (2018 through 2021), the corporation earned a total of $1,750,000 and paid dividends of 40 cents per share in each year on its outstanding common stock.

Prepare the stockholders equity section of the balance sheet at December 31, 2021. Include a supporting schedule showing your computation of the amount of retained earnings reported.