Question

The December 31, 2020, equity section of ZoomZoom Inc.'s balance sheet appears below. ZoomZoom Inc. Equity Section of the Balance Sheet December 31, 2020 Contributed capital: Preferred shares, $3.75 cumulative, 46,000 shares authorized and issued $1, 720,000 Preferred shares, $10 non-cumulative, 7,400 shares authorized and issued 730,000 Common shares, 460,000 shares authorized and issued 1, 810,000 Total contributed capital $4,260,000 Retained earnings 771, 600 Total equity $5,031, 600 Required: All the shares were issued on January 1, 2018 (when the corporation began operations). No dividends had been declared during the first two years of operations (2018 and 2019). During 2020, the cash dividends declared and paid totalled $643,300. 1. Calculate the amount of cash dividends paid during 2020 to each of the three classes of shares. Cash Dividends Cumulative preferred shares Noncumulative preferred shares Common shares2. Assuming profit earned during 2020 was $1,280,000, determine the December 31, 2019, balance in retained earnings. Retained earnings balance 3. Prepare a statement of changes in equity for the year ended December 31, 2020. (Amounts to be deducted should be indicated by a minus sign.) ZOOMZOOM INC. Statement of Changes in Equity For Year Ended December 31, 2020 Preferred Preferred Common Retained shares, shares, $10 shares earnings Total equity $3.75 cum. Non-cum. Balance, January 1 Issuance of shares Dividends Balance, December 31