Sun Corporation received a charter that authorized the issuance of 94,000 shares of $5 par common stock and 19,000 shares of $125 par, 6 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation: Year 1 Jan. 5 Sold 14,100 shares of the $5 par common stock for $7 per share. 12 Sold 1,900 shares of the 6 percent preferred stock for $135 per share. Apr. 5 Sold 18,800 shares of the $5 par common stock for $9 per share. Dec. 31 During the year, earned $305,400 in cash revenue and paid $242,700 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 2,850 shares of the $125 par preferred stock for $145 per share. May 5 Purchased 550 shares of the common stock as treasury stock at $10 per share. Dec. 31 During the year, earned $253,500 in cash revenues and paid $178,900 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 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. Required A Required B Required C 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.) Event Assest = Liabilities + SUN CORPORATION Accounting Equation Stockholders' Equity Paid-in Capital in Cash Dividends Payable Preferred Common Stock Stock + 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 98,700 = 0+ 0+ 0+ 0+ 0 Jan.12 256,500 = 0+ + 0+ + 0 0 + 0 Apr.5 169,200 = 0 + 0+ + 0+ 0 + 0 Dec.31 |= 0+ 0+ 0 + 0+ 0 0 + Dec.31 = 0+ 0+ 0+ 0+ 0- 0 + Service revenue Operating expenses Dec.31 0 = + 0+ 0+ 0+ 0 0+ Dividends Bal. 524,400 = 0+ 0+ 0 + 0 0 0 0 Year 2 Feb.15 = 0 0 0+ 0 0+ 0 Mar.3 413,250 = 0+ + 0+ + 0 0+ 0 May 5 (5,500) 0+ 0+ 0+ 0+ 0- + 0 Dec.31 0+ 0 0 0+ 0 0+ Dec.31 0+ 0+ 0 0+ 0 0 + Dec.31 0 = + 0+ 0+ 0+ 0 0 + Bal. 932,150 0+ 0 + 0+ 0+ 0 0+ 0 Service revenue Operating expenses Dividends 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) As of December 31, Year 1 Stockholders' equity Common stock Preferred stock Paid-in capital in excess of par-common stock Paid-in capital in excess of par-preferred stock Total paid-in capital Retained earnings Total stockholders' equity 0 $ 0 Required A Required B Required C Prepare the balance sheet at December 31, Year 2. (Negative amount should be indicated by a minus sign.) SUN CORPORATION Balance Sheet As of December 31, Year 2 Assets Cash Total assets Liabilities Dividend payable Total liabilities Stockholders' equity Paid-in capital in excess of par-common stock Paid-in capital in excess of par-preferred stock Common stock Total paid-in capital Retained earnings Less: Treasury stock (Common) Total stockholders' equity Total liabilities and stockholders' equity 0 $ 0 $ 0 0 $ 0