E12-21 Kelly Groucutt Company reported the following balances at December 31, 2007:

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Kelly Groucutt Company reported the following balances at December 31, 2007:
common stock $400,000; paid-in capital in excess of par value $100,000; retained earnings
$250,000. During 2008, the following transactions affected stockholder’s equity.
1. Issued preferred stock with a par value of $125,000 for $200,000.
2. Purchased treasury stock (common) for $40,000.
3. Earned net income of $140,000.
4. Declared and paid cash dividends of $56,000.

Instructions
Prepare the stockholders’ equity section of Kelly Groucutt Company’s December 31, 2008,
balance sheet.