Sun Corporation received a charter that authorized the issuance of 105,000 shares of $7 par common stock and 22,000 shares of $100 par, 7 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation: Year 1 Jan. 5 sold 15,750 shares of the $7 par common stock for $9 per share. 12 Sold 2,200 shares of the 7 percent preferred stock for $110 per share. Apr. 5 Sold 21,000 shares of the $7 par common stock for $11 per share. Dec.31 During the year, earned $310,000 in cash revenue and paid $241,900 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 3,300 shares of the $100 par preferred stock for $120 per share. May 5 Purchased 450 shares of the common stock as treasury stock at $14 per share. Dec.31 During the year, earned $245,900 in cash revenues and paid $175, 300 for cash operating expenses. 31 Declared the annual dividend on the preferred stock and a $0.25 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. SUN CORPORATION Accounting Equation Stockholders' Equity Event Assest = Liabilities + Cash II Dividends Payable Preferred Stock Common Stock Paid-in Paid-in Capital in Capital in + Excess of + Excess of Preferred Common Stock Stock Treasury Stock Retained Earnings Account Titles for Retained Earnings 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. + + + SUN CORPORATION Balance Sheet (Partial) As of December 31, Year 1 Stockholders' equity Total paid-in capital Total stockholders' equity 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