The following are selected account balances from Eastern Shore Ltd.€™s trial balance on December 31, 2010:

a. Prepare Eastern Shore€™s statement of earrings and retained earnings statement in good form for the year ended December 31, 2010.
b. Prepare the shareholders€™ equity section of the statement of financial position as at December 31, 2010.
c. Based on this information, does it appear likely that Eastern Shore will be able to continue paying common and preferred dividends at similar levels in the future? Explain.
d. Why might viewing Eastern Shore€™s statements or earnings for the previous few years help you in answering part €œc€? What other information would you find helpful in reaching a conclusion?

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Debits Credits Assets Liabilities Amortization expense Common dividends declared Share capital Cost of goods sold Interest expense Miscellaneous expense Preferred dividends declared Preferred shares Retained earnings Revenues Wage expense $21,390,000 $6,712,500 105,000 225,000 6,885,000 1,020,000 90,000 300,000 69,000 3,750,000 3,915,000 2,326,500 390,000 $23,589,000 $23,589,000