Prepare the stockholders equity section of the balance


Problem -

Sarasota Company was formed on July 1, 2015. It was authorized to issue 307,100 shares of $10 par value common stock and 99,200 shares of 7% $25 par value, cumulative and nonparticipating preferred stock. Sarasota Company has a July 1-June 30 fiscal year.

The following information relates to the stockholders' equity accounts of Sarasota Company.

Common Stock

Prior to the 2017-2018 fiscal year, Sarasota Company had 108,900 shares of outstanding common stock issued as follows.

1.88,600 shares were issued for cash on July 1, 2015, at $28 per share.2.On July 24, 2015, 5,000 shares were exchanged for a plot of land which cost the seller $69,700 in 2009 and had an estimated fair value of $216,200 on July 24, 2015.3.15,300 shares were issued on March 1, 2016, for $41 per share.

During the 2017-2018 fiscal year, the following transactions regarding common stock took place.

November 30, 2017Sarasota purchased 2,200 shares of its own stock on the open market at $36 per share. Sarasota uses the cost method for treasury stock.December 15, 2017Sarasota declared a 5% stock dividend for stockholders of record on January 15, 2018, to be issued on January 31, 2018. Sarasota was having a liquidity problem and could not afford a cash dividend at the time. Sarasota's common stock was selling at $49 per share on December 15, 2017.June 20, 2018Sarasota sold 470 shares of its own common stock that it had purchased on November 30, 2017, for $20,200.

Preferred Stock

Sarasota issued 37,200 shares of preferred stock at $45 per share on July 1, 2016.

Cash Dividends

Sarasota has followed a schedule of declaring cash dividends in December and June, with payment being made to stockholders of record in the following month. The cash dividends which have been declared since inception of the company through June 30, 2018, are shown below.

Declaration

Date

Common

Stock

Preferred

Stock

12/15/16$0.30 per share$1 per share6/15/17$0.30 per share$1 per share12/15/17$1 per share

No cash dividends were declared during June 2018 due to the company's liquidity problems.

Retained Earnings

As of June 30, 2017, Sarasota's retained earnings account had a balance of $670,000. For the fiscal year ending June 30, 2018, Sarasota reported net income of $41,500.

Prepare the stockholders' equity section of the balance sheet, for Sarasota Company as of June 30, 2018, as it should appear in its annual report to the shareholders. (Enter account name only and do not provide descriptive information.)

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Accounting Basics: Prepare the stockholders equity section of the balance
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