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Problem $8-23$A $($Algo$)$ Recording and reporting stock transactions and cash dividends across two

accounting cycles LO $8-3,8-4,8-5,8-6$

Sun Corporation received a charter that authorized the issuance of $87,000$ shares of $$5$ par common stock and $20,000$ 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 $13,050$ shares of the $$5$ par common stock for $$7$ per share.

$12$ Sold $2,000$ shares of the $4$ percent preferred stock for $$85$ per share.

Apr. $5$ Sold $17,400$ shares of the $$5$ par common stock for $$9$ per share.

Dec. $31$ During the year, earned $$314,000$ in cash revenue and paid $$239,400$ 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 $$75$ par preferred stock for $$95$ per share.

May $5$ Purchased $550$ shares of the common stock as treasury stock at $$10$ per share.

Dec. $31$ During the year, earned $$250,300$ in cash revenues and paid $$180,000$ for cash operating expenses.

$31$ Declared the annual dividend on the preferred stock and a $$0\mathrm{.}75$ 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 $2.$

Complete this question by entering your answers in the tabs below.

Organize the transaction data in accounts under an accounting equation. $($Enter any decreases to account balances with a minus sign. If $tl$

the account title. Leave the cell blank if there is no effect.$)$

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