Question

Sun Corporation received a charter that authorized the issuance of 104,000 shares of $4 par common stock and 19,000 shares of $75 par, 5 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation:

2018

Jan.	5		Sold 15,600 shares of the $4 par common stock for $6 per share.
	12		Sold 1,900 shares of the 5 percent preferred stock for $85 per share.
Apr.	5		Sold 20,800 shares of the $4 par common stock for $8 per share.
Dec.	31		During the year, earned $313,200 in cash revenue and paid $243,200 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 2,850 shares of the $75 par preferred stock for $95 per share.
May.	5		Purchased 450 shares of the common stock as treasury stock at $8 per share.
Dec.	31		During the year, earned $253,000 in cash revenues and paid $172,600 for cash operating expenses.
	31		Declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock.

Problem 8-23 Part a

Required

1. 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.)

b. Prepare the stockholders’ equity section of the balance sheet at December 31, 2018.

c. Prepare the balance sheets at December 31, 2019

Answer 1

in & Sun Corporation Accounting Equation for the year ending 318 Dec, 2018 Date Tassets Liab. + Particulass Shareludesk Equity I Cash 5 Spordit Sold 15600 shauls of $4 par com. I 93600 Corner Steelet Ref Stocket havidin 6s-traido Pas-foceno s. thesaber Stock at&6 per share 69 400 t o + 3/200+ o - otot 93600 a & 62400 tot 31200 to- oto Jau 12 sold 1900 shares of boef stacle of 1 + 161500 + 142.500 t o + 19000 - o t $75 par at $ 85 Per share o. 253/c0 - +62 40 & 142504 31200 ot 190000 to April 5 sold 20sw shares of 4 part com.st. I for 16640 83200 tot 83200 t .o to $ sper share Са | Гоо + 145oco +142500t 114400t 1900oto to Dec 31 Earned to $3132w in cash Rev. 70000 + + 0 0 + 0 + & paid $24320 for Eup 0 (313200 - 243200) + 0 +70060 49150 114400 of 19ow tot 70000 o t 14560 & 14250w of Dec 31 Decland Cash Dividend on outstanding Befesteck [5toof & 14250) + 114400 & 19000 to +62875 1456wt 1425W 7125 t 49150 Total 7125 tottet Hotter for 7125

Sun Corporation Accounting gration for the year ending 318 Dec 2010 Asset = lieb + shareholders Equity late / Pastculens Cash - Div. kayable & Comistit Poy, stale & Pouildin (Jan 2018 49150 Balances P. Stoce = san com Stoce 7125 stock & 1456 wat 14250t 144oo & quoo +62825 feb is paid Cash dividend - 712.5 = -7/2.3 484375 = o t 1458 wt 142500 +114yot 1900 no 462878 Mars sold 2850 shales of $75 Par Share on stock @ $950 Shase 270750 = oto t 213750 t o +57000 - oto 755125 = o + 16560 4 356250 + 114400+ Toew to +62875 Mays Puchland Go sheers of Com. + 0 0 0 0 + + sdock @ $ 8 Per shav as 0 -360+ - 3600 2 0 treasury stock 1751525 = ot 145out 356200 t 11440 t 76000 - 3600 +62875 Dec 31 Eawed 25301 cash sevend + 60 400 & peud 1726w Cash op. tsoleco . Enp [25300-172600 to 831925 = 6 + 1456ot 356250t 1144out 76c0-3600 t143275 Dec 31 Declared Refused drielud - 2500 0 + + + 0 0 - 0 0 O 2251W + @ 54.8162520 2 $ H25 | 1 & Bone common stock Diure in Cash @ oso Per share fo.so x 3595843640-45 831925=2550 + 1456 wt 35620d 11440 t tou, 36ot 118175

142.370 1/14400 19000 Stock holdes's Specity section of the Balance sheet as at 31st Dec, 2015 int T14560 36400, Comanon Steele issued out fora $ 4 Per shoul 1900, beferred stock issued at bas, $75 Peashare Paid in Cap Heel encess common share of par value Paid in capital ences of pas ratue - Preferred stacle Shareholder's Capital 62875 Retained Earnings 484375 Total shauliolder's Equity 42150 Balance sheet eet 31st Dec, 2019 in $ 831925 Assets Cash 831925 2s7oo Liabilities : Dividend payable To feel Latitities Shovelvolder's quity ? 36400, Comonon stacle issued at Peas, & upes share 4750 (196078890) Poet. sk. issued et par, 9 7 per paese faid in Cap encen, comme stoele par value said in cap. eneen of pas value prefered stack len! Preanay stock Brett Shareholder's Equity Retained Earning Total es | 145600 35621 11440 76000 792230 - 3600 688 650 118175 1806825 831925 To feel lias. se spuity