Sun Corporation received a charter that authorized the issuance of 91,000 shares of $5 par common stock and 20,000 shares of $100 par, 5 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation:

Year 1

Jan.5Sold 13,650 shares of the $5 par common stock for $7 per share.12Sold 2,000 shares of the 5 percent preferred stock for $110 per share.Apr.5Sold 18,200 shares of the $5 par common stock for $9 per share.Dec.31During the year, earned $303,400 in cash revenue and paid $237,300 for cash operating expenses.31Declared 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.15Paid the cash dividend declared on December 31, Year 1.Mar.3Sold 3,000 shares of the $100 par preferred stock for $120 per share.May5Purchased 550 shares of the common stock as treasury stock at $10 per share.Dec.31During the year, earned $245,700 in cash revenues and paid $171,200 for cash operating expenses.31Declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock.

Required

1. Organize the transaction data in accounts under an accounting equation.
2. Prepare the stockholders' equity section of the balance sheet at December 31, Year 1.
3. Prepare the balance sheet at December 31, Year 2.

SUN CORPORATION Balance Sheet (Partial) As of December 31, Year 1 Stockholders' equity Total paid-in capital Total stockholders' equityTotal assets Liabilities Total liabilities Stockholders' equity Total stockholders' equity _ Total liabilities and stockholders' equity SUN CORPORATION Accounting Equation Event Assest = Liabilities + Stockholders' Equity Paid-in Paid-in Dividends Preferred Common Capital in Capital in Cash Payable + Treasury Retained Account Titles for Stock + Stock + Excess of Excess of + Preferred Common Stock Earnings Retained Earnings Stock Stock 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.31 + + + + + + + + + Bal. + +