Sun Corporation received a charter that authorized the issuance of 86,000 shares of $6 par common stock and 19,000 shares of $125 par, 7 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation:

Year 1

Jan.	5		Sold 12,900 shares of the $6 par common stock for $8 per share.
	12		Sold 1,900 shares of the 7 percent preferred stock for $135 per share.
Apr.	5		Sold 17,200 shares of the $6 par common stock for $10 per share.
Dec.	31		During the year, earned $318,500 in cash revenue and paid $236,800 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 2,850 shares of the $125 par preferred stock for $145 per share.
May	5		Purchased 450 shares of the common stock as treasury stock at $12 per share.
Dec.	31		During the year, earned $250,000 in cash revenues and paid $170,200 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

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.

\begin{tabular}{|l|l|} \hline \multicolumn{2}{|c|}{ SUN CORPORATION } \\ \multicolumn{1}{|c|}{ Balance Sheet (Partial) } \\ \hline As of December 31, Year 1 \\ \hline & \\ \hline & \\ \hline & \\ \hline Total paid-in capital & \\ \hline & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{17}{|c|}{ SUN CORPORATION } \\ \hline \multicolumn{17}{|c|}{ Accounting Equation } \\ \hline Event & Assest & = & Liabilities & + & \multicolumn{11}{|c|}{ Stockholders' Equity } & \multirow[b]{2}{*}{\begin{tabular}{l} Account Titles for \\ Retained Earnings \end{tabular}} \\ \hline & Cash & = & \begin{tabular}{l} Dividends \\ Payable \end{tabular} & + & \begin{tabular}{c} Preferred \\ Stock \end{tabular} & + & \begin{tabular}{l} Common \\ Stock \end{tabular} & + & \begin{tabular}{l} Paid-in \\ Capital in \\ Excess of \\ Preferred \\ Stock \end{tabular} & + & \begin{tabular}{l} Paid-in \\ Capital in \\ Excess of \\ Common \\ Stock \end{tabular} & - & \begin{tabular}{c} Treasury \\ Stock \end{tabular} & + & \begin{tabular}{l} Retained \\ Earnings \end{tabular} & \\ \hline Year 1 & & & & & & & & & & & & & & & & \\ \hline Jan. 5 & & = & & + & & + & & + & & + & & - & & + & & \\ \hline Jan.12 & & = & & + & & + & & + & & + & & - & & + & & \\ \hline Apr.5 & & = & & + & & + & & + & & + & & - & & + & & \\ \hline Dec.31 & & = & & + & & + & & + & & + & & - & & + & & \\ \hline Dec.31 & & = & & + & & + & & + & & + & & - & & + & & \\ \hline Dec.31 & & = & & + & & + & & + & & + & & - & & + & & \\ \hline Bal. & & = & & + & & + & & + & & + & & - & & + & & \\ \hline Year 2 & & & & & & & & & & & & & & & & \\ \hline Feb.15 & & = & & + & & + & & + & & + & & - & & + & & \\ \hline Mar.3 & & = & & + & & + & & + & & + & & - & & + & & \\ \hline May 5 & & = & & + & & + & & + & & + & & - & & + & & \\ \hline Dec.31 & & = & & + & & + & & + & & + & & - & & + & & \\ \hline Dec.31 & & = & & + & & + & & + & & + & & - & & + & & \\ \hline Dec.31 & & = & & + & & + & & + & & + & & - & & + & & \\ \hline Bal. & & = & & + & & + & & + & & + & & - & & + & & \\ \hline \end{tabular} SUN CORPORATION Balance Sheet As of December 31, Year 2 \begin{tabular}{|l|l|l|} \hline Assets & & \\ \hline & & \\ \hline & & \\ \hline Total assets & & \\ \hline Liabilities & & \\ \hline & & \\ \hline Total liabilities & & \\ \hline Stockholders' equity & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Total paid-in capital & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular}