60.1K

Verified Solution

Link Copied!

Sun Corporation received a charter that authorized the issuance of 83,000 shares of $6 par common stock and 21,000 shares of $100 par, 4 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation: 2018 Jan. 5 Sold 12,450 shares of the $6 par common stock for $8 per share. 12 Sold 2,100 shares of the 4 percent preferred stock for $110 per share. Apr. 5 Sold 16,600 shares of the $6 par common stock for $10 per share. Dec.31 During the year, earned $313,700 in cash revenue and paid $237,400 for cash operating expenses. 31 Declared the cash dividend on the outstanding shares of preferred stock for 2018. The dividend will be paid on February 15 to stockholders of record on January 10, 2019. 2019 Feb. 15 Paid the cash dividend declared on December 31, 2018. Mar. 3 Sold 3,150 shares of the $100 par preferred stock for $120 per share. May. 5 Purchased 450 shares of the common stock as treasury stock at $12 per share. Dec.31 During the year, earned $252,400 in cash revenues and paid $170,200 for cash operating expenses. 31 Declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock. a. Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. Indicating to provide separate effect on accounting equation for Revenue, Operating expense, and leave the cell blank if there is no effect.) Sun Corporation Accounting Equation Stockholders' Equity Event Assest = Liabilities Cash 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 Accounts Titles for Earnings Retained Earnings 2018 Jan.5 + + + Jan. 12 = + + + + + + + + + + Apr.5 Dec. 31 = + + + + - + Dec.31 + + + + + Dec.31 + + + + + Bal. 0 = 0 + 01 + 0+ 0+ 0- 0 + 0 2019 Feb. 15 + + + + Mar. 3 + 1 + + + + + + + + May.5 Dec.31 = + + + + + + Dec.31 + + + + + + Dec.31 = + + + + + Bal. 0 = 0 + 0 + 0+ 0 + 0 0 + 0

Answer & Explanation Solved by verified expert

See Answer