Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sun Corporation received a charter that authorized the issuance of 96,000 shares of $3 par common stock and 22,000 shares of $75 par, 4 percent

Sun Corporation received a charter that authorized the issuance of 96,000 shares of $3 par common stock and 22,000 shares of $75 par, 4 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation: Year 1

Jan. 5 Sold 14,400 shares of the $3 par common stock for $5 per share.
12 Sold 2,200 shares of the 4 percent preferred stock for $85 per share.
Apr. 5 Sold 19,200 shares of the $3 par common stock for $7 per share.
Dec. 31 During the year, earned $314,200 in cash revenue and paid $240,000 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.
31 Closed the revenue, expense, and dividend accounts to the retained earnings account.

Year 2

Feb. 15 Paid the cash dividend declared on December 31, Year 1.
Mar. 3 Sold 3,300 shares of the $75 par preferred stock for $95 per share.
May 5 Purchased 600 shares of the common stock as treasury stock at $6 per share.
Dec. 31 During the year, earned $249,600 in cash revenues and paid $175,600 for cash operating expenses.
31 Declared the annual dividend on the preferred stock and a $0.75 per share dividend on the common stock.
31 Closed revenue, expense, and dividend accounts to the retained earnings account.

b. Prepare the balance sheets at December 31, Year 1 and Year 2. (Amounts to be deducted should be indicated with minus sign.)

image text in transcribed

image text in transcribed

b. Prepare the balance sheets at December 31, Year 1 and Year 2. (Am SUN CORPORATION Balance Sheet As of December 31, Year 1 Assets Total assets Liabilities Total liabilities Stockholders' equity Total paid-in capital Total stockholders' equity Total liabilities and 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Financial Accounting

Authors: Richard E. Baker, Valdean C. Lembke, Thomas E. King

3rd Edition

0070054142, 978-0070054141

More Books

Students also viewed these Accounting questions

Question

Define self-discipline. (p. 210)

Answered: 1 week ago