Problem 11-26A (Algo) Recording and reporting stock transactions and cash dividends across two accounting cycles LO 11-3, 11-6

Skip to question

[The following information applies to the questions displayed below.]

Sun Corporation received a charter that authorized the issuance of 108,000 shares of $8 par common stock and 20,000 shares of $75 par, 6 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation.

Year 1

January 5	Sold 16,200 shares of the $8 par common stock for $10 per share.
January 12	Sold 2,000 shares of the 6 percent preferred stock for $85 per share.
April 5	Sold 21,600 shares of the $8 par common stock for $12 per share.
December 31	During the year, earned $306,700 in cash revenue and paid $240,000 for cash operating expenses.
December 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

February 15	Paid the cash dividend declared on December 31, Year 1.
March 3	Sold 3,000 shares of the $75 par preferred stock for $95 per share.
May 5	Purchased 500 shares of the common stock as treasury stock at $16 per share.
December 31	During the year, earned $251,500 in cash revenues and paid $175,600 for cash operating expenses.
December 31	Declared the annual dividend on the preferred stock and a $0.25 per share dividend on the common stock.

Problem 11-26A (Algo) Part c

c-1. What is the number of common shares outstanding at the end of Year 1? At the end of Year 2? How many common shares had been issued at the end of Year 1? At the end of Year 2?

Note: Amounts to be deducted should be indicated with minus sign.

c-2. Are there any differences between issued and outstanding common shares for Year 1 and Year 2?