The following summaries for Ruby Distributors Ltd. and Gem Wholesalers Inc. provide the information needed to prepare the shareholders’ equity section of each company’s balance sheet. The two companies are independent. Ruby Distributors Ltd. This company is authorized to issue 150,000 common shares. All the shares were issued at $3.00 per share. The company incurred a net loss of $75,000 in 2014 (its first year of operations) and a net loss of $30,000 in 2018. It earned net incomes of $35,000 in 2019 and $60,000 in 2020. The company declared no dividends during the four-year period.

Gem Wholesalers Inc. Gem Wholesalers Inc.’s articles of incorporation authorize the company to issue 200,000 cumulative preferred shares and 1,000,000 common shares. Gem Wholesalers Inc. issued 2,000 preferred shares at $12.50 per share. It issued 100,000 common shares for $300,000. The company’s Retained Earnings balance at the beginning of 2020 was $75,000. Net income for 2020 was $50,000, and the company declared the specified preferred share dividend for 2020. Preferred share dividends for 2019 were in arrears. The preferred dividend was $1.10 per share per year.

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.