Southwestern Exposure Ltd. began operations on January 2, 2020. During the year, the following transactions affected shareholders' equity: 1. Southwestern Exposure's articles of incorporation authorize the issuance of 1,040,000 common shares, and the issuance of 260,000 preferred shares, which pay an annual dividend of $2.50 per share. 2. A total of 240,000 common shares were issued for $4 a share. 3. A total of 10,000 preferred shares were issued for $14 per share. 4. The full annual dividend on the preferred shares was declared. 5. The dividend on the preferred shares was paid. 6. A dividend of $0.10 per share was declared on the common shares but was not yet paid. 7. The company had net income of $138,000 for the year. (Assume sales of $758,000 and total operating expenses of $620,000.) 8. The dividends on the common shares were paid. 9. The closing entry for the dividends declared accounts was prepared. No. Account and explanation Debit Credit 1. No Entry No Entry 2. Cash 960000 Common Shares 960000 3. Cash 140000 Preferred Shares 140000 4. Dividends Declared 25000 Dividends Declared - Preferred Shares 25000 5. Cash 25000 Dividends Declared - Preferred Shares 25000 6. Dividends Declared 24000 Dividends Declared - Common Shares 24000 7. Sales Revenue 758000 Income Summary 758000 (To close revenue account.) Income Summary 620000 Operating Expenses 620000 (To close expense account.) Income Summary 138000 Retained Earnings 138000 (To close net income.) 8. Cash 24000 Dividends Payable 24000 9. Retained Earnings 49000 Dividends Payable 49000 Prepare the shareholders' equity section of the statement of financial position as at December 31, 2020. Shareholders' Equity, December 31, 2020 Total Shareholders' Equity $ Tartbealand Media