Sarah Co. has the following stockholders' equity for 12/31/2019: $ 25,000 1,400 26,400 Preferred stock, 8%, $50 par, 3,000 shares authorized, 500 shares issued and outstanding Common stock, $.20 par, 10,000 shares authorized, 7,000 shares issued, and 6,700 shares outstanding Total capital stock Additional paid-in capital: Preferred Common Total paid-in capital Retained earnings Treasury Stock (300 shares at $25 cost) Total stockholders' equity 208,600 235,000 280,000 (7,500 $ 507,500 Required: Record the transactions listed and prepare the 2020 stockholders' equity section of the balance sheet. The company reported NI of $90,000 for 2020. (a) Record the transactions listed. (1) Sold 100 shares of its treasury stock at $35 per share. The company uses the cost method. (2) Issued 300 shares of preferred stock for a patent. The stock was trading for $51 at the time of the exchange. (3) Declared and issued a 2:1 stock split on common stock when the common stock is selling at $40 per share. (4) Declared and immediately paid annual dividends of $10 and $2 per share for preferred and common, respectively. Show separately the calculations for total dividends paid to common and preferred following the journal entry. Calculations: (b) Prepare 12/31/2020 stockholders' equity section of the balance sheet. In your solution, follow the format shown for the 12/31/2019 stockholders' equity (above). Show selected calculations following the presentation of stockholders' equity. Sarah Company Stockholders' Equity December 31 2020 Capital stock Total capital stock Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Required calculations: i. Common stock ii. Additional PIC - Common 111. Treasury stock