Problem

Shelby Corporation was organized in January to operate an air-conditioning sales and service business. The charter issued by the state authorized the following capital stock:

Common stock, $1 par value, 200,000 shares.
Preferred stock, $10 par value, 6 percent, 50,000 shares.

During January and February, the following stock transactions were completed:

a. Collected $729,000 cash and issued 27,000 shares of common stock.

b. Issued 18,500 shares of preferred stock at $37 per share; collected in cash.

Net income for the year was $57,000; cash dividends declared and paid at year-end were $11,000.

Required:

Prepare the stockholders' equity section of the balance sheet at December 31.