Richard Tandy Company reported the following balances at December 31, 2019: common stock $500,000; paid-in capital in excess of par-commonstock $200,000; retained earnings $350,000. During 2020, the following transactions affected stockholder's equity.

1. Issued preferred stock with a par value of $200,000 for $230,000.
2. Purchased treasury stock (common) for $70,000.
3. Earned net income of $240,000.
4. Declared and paid cash dividends of $86,000 ($16,000 preferred).

Instructions:

(a) Prepare the stockholders' equity section of Richard Tandy Company's December 31, 2020, balance sheet.

(b) Compute Tandy's 2020 return on common stockholders' equity.