Sun Corporation received a charter that authorized the issuance of 84,000 shares of $5 par common stock and 20,000 shares of $125 par, 5 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation: Year 1 Jan. 5 Sold 12,600 shares of the $5 par common stock for $7 per share. 12 Sold 2,000 shares of the 5 percent preferred stock for $135 per share. Apr. 5 Sold 16,800 shares of the $5 par common stock for $9 per share. Dec. 31 During the year, earned $304,600 in cash revenue and paid $239,200 for cash operating expenses. Year 2 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. Feb. 15 Paid the cash dividend declared on December 31, Year 1. Mar. 3 Sold 3,000 shares of the $125 par preferred stock for $145 per share. Hay 5 Purchased 500 shares of the common stock as treasury stock at $10 per share. Dec. 31 During the year, earned $248,700 in cash revenues and paid $179,200 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. Complete this question by entering your answers in the tabs below. Event Assest Liabilities Year 1 Jan 5 Jan.12 Apr.5 Dec 31 Dec.31 Dec.31 Bal Year 2 Feb.15 Mar 3 May 5 Dec 31 Dec 31 Dec Bal 31 SUN CORPORATION Accounting Equation Stockholders' Equity Paid-in Paid-in Cash Dividends Payable Preferred Stock Capital in Common Stock + Excess of Capital in +Excess of Treasury Stock Retained Account Titles for Earnings Retained Earnings Preferred Stock Common Stock + + + + + + + Required A Required B > Required A Required B Required C Prepare the stockholders' equity section of the balance sheet at December 31, Year 1. SUN CORPORATION Balance Sheet (Partial) Stockholders' equity Total paid-in capital As of December 31, Year 1 Total stockholders' equity Assets SUN CORPORATION Balance Sheet As of December 31, Year 2 Total assets Liabilities Total liabilities Stockholders' equity Total paid-in capital Total stockholders' equity Total liabilities and stockholders' equity Evaluation Question Based on the first problem in the exam, write a paragraph discussing the differences between common stock and preferred stock from the investor's perspective for Sun Corporation. Comment specifically on dividends, potential for future increase in share price and risks. Essay Toolbar navigation.