Sarasota Company was formed on July 1, 2015. It was authorized to issue307,100shares of $10par value common stock and99,200shares of7% $25par value, cumulative and nonparticipating preferred stock. Sarasota Company has a July 1June 30 fiscal year.

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

Common Stock

Prior to the 20172018 fiscal year, Sarasota Company had108,900shares of outstanding common stock issued as follows.

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

During the 20172018 fiscal year, the following transactions regarding common stock took place.

November30,2017Sarasota purchased2,200shares of its own stock on the open market at $36per share. Sarasota uses the cost method for treasury stock.December15,2017Sarasota declared a5% 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. Sarasotas common stock was selling at $49per share on December 15, 2017.June20,2018Sarasota sold470shares of its own common stock that it had purchased on November 30, 2017, for $20,200.

Preferred Stock

Sarasota issued37,200shares of preferred stock at $45per 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$0.30per share$1per share6/15/17$0.30per share$1per share12/15/17$1per share

No cash dividends were declared during June 2018 due to the companys liquidity problems.

Retained Earnings

As of June 30, 2017, Sarasotas 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.

PLEASE EXPLAIN HOW EACH NUMBER WAS REACHED. Thank you