Sun Corporation received a charter that authorized the issuance of 103,000 shares of $7 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 15,450 shares of the $7 par common stock for $9 per share. 12 Sold 2,000 shares of the 5 percent preferred stock for $135 per share. Apr. 5 Sold 20,600 shares of the $7 par common stock for $11 per share. Dec.31 During the year, earned $304,500 in cash revenue and paid $235, 100 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. 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. May 5 Purchased 450 shares of the common stock as treasury stock at $14 per share. Dec.31 During the year, earned $252,600 in cash revenues and paid $179,900 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. Account Treasury Retained Titles for + Stock Earnings Retained Earnings SUN CORPORATION Accounting Equation Event Assest = Liabilities + Stockholders' Equity Paid-in Paid-in Capital Capital in in Dividends Preferred Common Cash = + + + Excess + Excess Payable Stock Stock of of Preferred Common 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. + + + + + + + + + + + + + + + + + + + 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 Total paid-in capital Total stockholders' equity 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 Total assets Liabilities Total liabilities Stockholders' equity Total paid-in capital Total stockholders' equity Total liabilities and stockholders' equity