Question 1

Johnson & Smith Inc. ended 2019 with Retained Earnings of $100,000. During 2020, the company earned net income of $165,000 and declared dividends of $35,000. The company ended 2019 with $40,000 in common shares and $20,000 in $1 preferred shares. Additional common shares were sold in 2020 for $20,000.

Required:

Complete Johnson & Smith Inc.'s statement of shareholders' equity for the year ended December 31, 2020.

Johnson & Smith Inc.

Statement of Shareholders' Equity

For the Year Ended December 31, 2020

Common Shares Preferred Shares Retained Earnings Total Shareholders' Equity Balance

December 31, 2019

Balance December