Problem 8-23A (Algo) Recording and reporting stock transactions and cash dividends across two accounting cycles LO 8-3, 8-4, 8-5, 8-6 Sun Corporation received a charter that authorized the issuance of 83,000 shares of $8 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 12,450 shares of the $8 par common stock for $10 per share. 12 Sold 1,900 shares of the 7 percent preferred stock for $85 per share. Apr. 5 Sold 16,600 shares of the $8 par common stock for $12 per share. Dec.31 During the year, earned $302,200 in cash revenue and paid $242,600 for cash optating 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 $95 per share. May 5 Purchased 500 shares of the common stock as treasury stock at $16 per share. Dec.31 During the year, earned $245,000 in cash revenues and paid $171,500 for cash operating expenses. 31 Declared the annual dividend on the preferred stock and a $0.50 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 Balance Sheet (Partial) As of December 31, Year 1 Stockholders' equity \begin{tabular}{|l|l|l|} \hline? & & \\ \hline? & & \\ \hline? & & 0 \\ \hline? & & \\ \hline? & & \\ \hline Total paid-in capital & & \\ \hline? & & \\ \hline? & & \\ \hline \end{tabular} Sun Corporation Balance Sheet As of December 31, Year 2 Assets