Penn Company was formed on July 1, 2012. It was authorized to issue 305,000 shares of $11 par value common stock and 108,500 shares of 8% $24 par value, cumulative and nonparticipating preferred stock. Penn Company has a July 1June 30 fiscal year. The following information relates to the stockholders equity accounts of Penn Company. Common Stock Prior to the 20142015 fiscal year, Penn Company had 118,500 shares of outstanding common stock issued as follows. 1. 91,300 shares were issued for cash on July 1, 2012, at $31 per share. 2. On July 24, 2012, 5,000 shares were exchanged for a plot of land which cost the seller $70,600 in 2006 and had an estimated fair value of $227,800 on July 24, 2012. 3. 22,000 shares were issued on March 1, 2013, for $41 per share.

During the 20142015 fiscal year, the following transactions regarding common stock took place.

November 30, 2014 Penn purchased 2,500 shares of its own stock on the open market at $38 per share. Penn uses the cost method for treasury stock. December 15, 2014 Penn declared a 5% stock dividend for stockholders of record on January 15, 2015, to be issued on January 31, 2015. Penn was having a liquidity problem and could not afford a cash dividend at the time. Penns common stock was selling at $51 per share on December 15, 2014. June 20, 2015 Penn sold 450 shares of its own common stock that it had purchased on November 30, 2014, for $22,700. Preferred Stock Penn issued 41,200 shares of preferred stock at $45 per share on July 1, 2013. Cash Dividends Penn 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, 2015, are shown below.

Declaration Date Common Stock Preferred Stock 12/15/13 $0.42 per share $1.00 per share 6/15/14 $0.42 per share $1.00 per share 12/15/14 $1.00 per share No cash dividends were declared during June 2015 due to the companys liquidity problems.

Retained Earnings As of June 30, 2014, Penns retained earnings account had a balance of $708,100. For the fiscal year ending June 30, 2015, Penn reported net income of $41,400.

Instructions Prepare the stockholders equity section of the balance sheet, including appropriate notes, for Penn Company as of June 30, 2015, as it should appear in its annual report to the shareholders.