ICA 8

Sun Corporation received a charter that authorized the issuance of 94,000 shares of $5 par common stock and 19,000 shares of $75 par, 7 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation: Year 1 Jan. 5 sold 14,100 shares of the $5 par common stock for $7 per share. 12 sold 1,900 shares of the 7 percent preferred stock for $85 per share. Apr. 5 Sold 18,80e shares of the \$5 par comen stock for \$9 per share. Dec. 31 During the year, earned $316,100 in cash revenue and paid $237,800 for cash operating expenses. 31 Declared the cash dividend on the outstanding shares of preferred stock for Year 1. The dividend will be paid on February 15 to stockholders of record on January 10, Year 2. Year 2 Feb.15 Paid the cash dividend declared on December 31, Year 1. Mar. 3 Sold 2,850 shares of the $75 par preferred stock for s95 per share. May 5 Purchased 450 shares of the common stock as treasury stock at $10 per share. Dec. 31 During the year, earned $251,800 in cash revenues and paid $177, 700 for cash operating expenses. 31 Declared the annual dividend on the preferred stock and a se.50 per share dividend on the common stock. Required a. Organize the transaction data in accounts under an accounting equation. b. Prepare the stockholders' equity section of the balance sheet at December 31 , Year 1 . c. Prepare the balance sheet at December 31, Year 2. SUN CORPORATION Accounting Equation + Prepare the stockholders' equity section of the balance sheet at December 31 , Year 1 . SUN CORPORATION Balance Sheet As of December 31, Year 2 Assets Total assets Liabilities Total liabilities Stockholders' equity Total paid-in capital