Razul took the proceeds from dissolving the partnership and purchased a corporation selling electrical parts used for large production companies. He employs several people, but is looking to expand his operations further. In addition to expanding the sales of electrical parts, he also wants to start selling heating, ventilation and air conditioning (HVAC) parts and machinery through a separate division of the company called 'HVAC Parts & Machinery.' Currently, Razul owns all the shares in the corporation. To raise the needed cash, he decides to offer common and preferred shares for sale to investors starting in 2021. Below is the balance sheet at the end of 2020. Holister Electric Inc. Balance Sheet As at December 31, 2020 New Tab Assets Cash Accounts Receivable Prepaid Insurance Liabilities $32,850 Accounts Payable 21,420 Unearned Revenue 11,300 Bank Loan Inventory 75,200 Total Liabilities $33,500 10,800 37,200 81,500 Property, Plant & Equipment 218,000 Shareholders' Equity Accumulated Depreciation -46,000 Common Shares - 100,000 issued 100,000 Retained Earnings 131,270 Total Shareholder's Equity 231,270 Total Assets $312,770 Liabilities & Owner's Equity $312,770 At 2020, Razul has authorized 170,000 common shares and 15,000 preferred shares. The preferred shares will be cumulative and pay $9 dividends. The 100,000 shares issued were issued to Razul. He will maintain control of the company and sit on the board of directors. Transactions during 2021 a) On January 1, Holister purchased a strategic investment of 21,000 shares in Gregor Inc. for $17 per share. This represents 33% of Gregor Inc. common shares. On December 31, Gregor Inc. declares and pays a $109,000 dividend and reports a net income of $425,600. Holister will use the equity method to record this investment. b) On January 1, Razul has located a few private investors that wish to purchase shares in the new corporation. Some want common shares, while other are interested in preferred shares. Holister Electric Inc. issued 60,000 common shares for $150,000 cash and issued 11,000 preferred shares for $44,000 cash.