Shareholders’ equity information is given for Kabaddi Corp. and Kerala Ltd. The two companies are independent.

Kabaddi Corp. Kabaddi Corp. is authorized to issue 100,000 common shares. All the shares were issued at $10.00 per share. The company incurred a net loss of $30,000 in 2018, its first year of business. It earned net income of $45,000 in 2019 and $50,000 in 2020. The company declared no dividends during the three-year period.

Kerala Ltd. Kerala Ltd.’s articles of incorporation authorize the company to issue 50,000 $1.25 cumulative preferred shares and 500,000 common shares. Kerala Ltd.

issued 4,000 preferred shares at $10.00 per share. It issued 60,000 common shares for a total of $150,000. The company’s Retained Earnings balance at the beginning of 2020 was $55,000, and net income for the year was $62,500. During 2020, the company declared the specified dividend on preferred shares and a $0.50 per share dividend on common shares. Preferred dividends for 2019 were in arrears.

Required

For each company, prepare the shareholders’ equity section of its balance sheet at December 31, 2020. Show the computation of all amounts. Journal entries are not required.