Question
NEED HELP PLEASE! I can't seem to figure what I am missing and how to correct what I have wrong. Sun Corporation received a charter
NEED HELP PLEASE! I can't seem to figure what I am missing and how to correct what I have wrong.
Sun Corporation received a charter that authorized the issuance of 119,000 shares of $5 par common stock and 20,000 shares of $75 par, 5 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation:
Year 1
| Jan. | 5 | Sold 17,850 shares of the $5 par common stock for $7 per share. | |
| 12 | Sold 2,000 shares of the 5 percent preferred stock for $85 per share. | ||
| Apr. | 5 | Sold 23,800 shares of the $5 par common stock for $9 per share. | |
| Dec. | 31 | During the year, earned $301,100 in cash revenue and paid $238,200 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 3,000 shares of the $75 par preferred stock for $95 per share. | |
| May | 5 | Purchased 550 shares of the common stock as treasury stock at $10 per share. | |
| Dec. | 31 | During the year, earned $248,800 in cash revenues and paid $175,300 for cash operating expenses. | |
| 31 | Declared the annual dividend on the preferred stock and a $0.75 per share dividend on the common stock. |
Required
- Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. If there is an effect to Retained earnings, indicate the account title. Leave the cell blank if there is no effect.)
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SUN CORPORATION Accounting Equation Event Assest = Liabilities + Stockholders Equity Cash = Dividends Payable + Preferred Stock + Common Stock + Paid-in Capital in Excess of Preferred Stock + Paid-in Capital in Excess of Common Stock Treasury Stock + Retained Earnings Account Titles for Retained Earnings Year 1 Jan.5 124,950 = + + 89,250 + + 35,700 + Jan.12 170,000 = + 150,000 + + 20,000 + + Apr.5 214,200 = + + 119,000 + + 95,200 + Dec.31 62,900 answer INCORRECT = + + + + + 62,900 INCORRECT Service revenue Dec.31 = + + + + + (7,500 Dividends Dec.31 = 7,500 INCORRECT + + + + Operating expenses Bal. 572,050 = 7,500 + 150,000 + 208,250 + 20,000 + 130,900 0 + 55,400 Year 2 Feb.15 (7,500) = (7,500) + + + + + Mar.3 285,000 = + 225,000 + + 60,000 + + May 5 (5,500) = + + + + 5,500 + Dec.31 73,500 INCORRECT = + + + + + 73,500 INCORRECT Service revenue Dec.31 = + + + + + Operating expenses Dec.31 = +t + + + + (49,575) a Dividends Bal. 917,550 = 0 + 375,000 + 208,250 + 80,000 + 130,900 5,500 + 79,325
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South Western Federal Taxation 2014 Comprehensive Volume
Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young
37th Edition
1285180925, 978-1285180922
