Required information Problem 11-25A Recording and reporting stock transactions and cash dividends across two accounting cycles LO 11-3, 11-6 The following information applies to the questions displayed below.) Sun Corporation received a charter that authorized the issuance of 100,000 shares of $10 par common stock and 50,000 shares of $50 par, 5 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation: Year 1 Jan. 5 Sold 6,000 shares of the $10 par common stock for $15 per share. 12 Sold 1,000 shares of the 5 percent preferred stock for $55 per share. Apr. 5 Sold 30,000 shares of the $10 par common stock for $21 per share. Dec. 31 During the year, earned $150,000 in cash revenue and paid $88,000 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. 31 Closed the revenue, expense, and dividend accounts to the retained earnings account. Year 2 Feb. 15 Paid the cash dividend declared on December 31, Year 1. Mar. 3 Sold 15,000 shares of the $50 par preferred stock for $53 per share. May 5 Purchased 900 shares of the common stock as treasury stock at $24 per share. Dec. 31 During the year, earned $210,000 in cash revenues and paid $98,000 for cash operating expenses. 31 Declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock. 31 Closed revenue, expense, and dividend accounts to the retained earnings account. Journal entry worksheet 2 3 4 5 6 7 8 18 Sold 6,000 shares of the $10 par common stock for $15 per share. CE Note: Enter debits before credits. General Journal Debit Credit Date Jan 05 05 Year 1 Cash Dividends Payable Year 1 End. Bal. End. Bal. Retained Earnings Preferred Stock Year 1 Year 1 End. Bal. End. Bal. 3 4 4 5 5 5 5! Neyt Required information Common Stock Pald-in Capital in Excess of Par-Preferred Stock Year 1 Year 1 TTT End. Bal. End. Bal. Dividends Paid-in Capital in Excess of Par-Common Stock Year 1 Year 1 End. Bal. End. Bal. Service Revenue Operating Expenses Year 1 Year 1 End. Bal. End. Bal. Year 2 Cash Dividends Payable Year 2 Beg. Bal. Year 2 Beg. Bal. 11 III End. Bal. End. Bal. Retained Earnings Preferred Stock Year 2 Beg. Bal. Year Beg / / LUI LUD End. Bal. Common Stock Year 2 Beg. Bal. Paid-in Capital in Excess of Par-Preferred Stock Year 2 Beg. Bal. End. Bal. End. Bal. Dividends Paid-in Capital in Excess of Par-Common Stock Year 2 Beg. Bal. Year 2 Beg. Bal. End. Bal. End. Bal. Treasury Stock (Common) Service Revenue Year 2 Beg. Bal. Year 2 Beg. Bal. End. Bal. End. Bal. ces Operating Expenses Year 2 Beg. Bal. End. Bal
