The following account balances can be found in the general ledger of McKinney de Garcia Energy Products Corporation at year end. Prepare the shareholders’ equity section of the balance sheet.

Retained earnings ...................$ 320,000

Treasury stock (5,000 common shares at cost) ........ 45,000

Common stock ($1 par, 600,000 shares authorized,

275,000 shares issued) ................. 275,000

Additional paid-in capital, common stock .........1,787,500

Preferred stock ($6 par value, 10%, 80,000 shares authorized,

25,000 shares issued) ................. 150,000

Additional paid-in capital, preferred stock ........ 25,000