Question

Riverbed Company was formed on July 1, 2015. It was authorized to issue 314,700 shares of $10 par value common stock and 100,600 shares of 8% $25 par value, cumulative and nonparticipating preferred stock. Riverbed Company has a July 1–June 30 fiscal year.

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

Common Stock
Prior to the 2017–2018 fiscal year, Riverbed Company had 110,800 shares of outstanding common stock issued as follows.

1.		84,500 shares were issued for cash on July 1, 2015, at $30 per share.
2.		On July 24, 2015, 5,000 shares were exchanged for a plot of land which cost the seller $67,100 in 2009 and had an estimated fair value of $223,300 on July 24, 2015.
3.		21,300 shares were issued on March 1, 2016, for $46 per share.

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

November 30, 2017		Riverbed purchased 2,200 shares of its own stock on the open market at $40 per share. Riverbed uses the cost method for treasury stock.
December 15, 2017		Riverbed declared a 5% stock dividend for stockholders of record on January 15, 2018, to be issued on January 31, 2018. Riverbed was having a liquidity problem and could not afford a cash dividend at the time. Riverbed’s common stock was selling at $52 per share on December 15, 2017.
June 20, 2018		Riverbed sold 480 shares of its own common stock that it had purchased on November 30, 2017, for $19,400.

Preferred Stock
Riverbed issued 39,200 shares of preferred stock at $45 per share on July 1, 2016.

Cash Dividends
Riverbed 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 share
6/15/17		$0.30 per share		$1 per share
12/15/17				$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, Riverbed’s retained earnings account had a balance of $715,900. For the fiscal year ending June 30, 2018, Riverbed reported net income of $41,500.

Prepare the stockholders’ equity section of the balance sheet, for Riverbed 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.

Answer 1

Riverbed Company
Stockholders’ Equity
June 30, 2018
Capital stock
preferred stock (39200*25)	980000
Common stock (110800*10)+(5430*10)	1162300
Total capital stock		2142300
Additional paid-in capital
In excess of par-preferred (39200*(45-25))	784000
In excess of par-common (84500*(30-10))+(223300-(5000*10))+(21300*(46-10))+ (((110800-2200)*5%)*(52-10))	2858160
Less: From treasury stock (480*(40-(19400/480)))	200	3641960
Total paid-in capital		5784260
Retained earnings (715900+41500-(5430*52)-39200)		435840
Total paid-in capital and retained earnings		6220100
Less: Treasury stock (2200-480)*40
Total stockholders’ equity		6151300