Sun Corporation received a charter that authorized the issuance of 118,000 share

Question

Sun Corporation received a charter that authorized the issuance of 118,000 shares of $6 par common stock and 19,000 shares of $100 par, 8 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation:

2018

2019

Required

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 "NA" for no effect.)

Jan. 5 Sold 17,700 shares of the $6 par common stock for $8 per share. 12 Sold 1,900 shares of the 8 percent preferred stock for $110 per share. Apr. 5 Sold 23,600 shares of the $6 par common stock for $10 per share. Dec. 31 During the year, earned $304,800 in cash revenue and paid $240,100 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.

Explanation / Answer

Solution:

Date Assets = Liabilities + Stockholder's Equity Retained Earnings Cash = Dividend Payable Common Stock + Paid in capital in excess of Par - Common Stock + Preferred Stock + Paid in capital in excess of Par - Preferred Stock - Treasury Stock Revenue - Expenditure - Dividend 2018 5-Jan $141,600.00 $106,200.00 $35,400.00 12-Jan $209,000.00 $190,000.00 $19,000.00 5-Apr $236,000.00 $141,600.00 $94,400.00 31-Dec $64,700.00 $304,800.00 $240,100.00 31-Dec $15,200.00 $15,200.00 2019 15-Feb -$15,200.00 -$15,200.00 3-Mar $342,000.00 $285,000.00 $57,000.00 5-May -$5,400.00 $5,400.00 31-Dec $72,000.00 $250,900.00 $178,900.00 31-Dec $48,212.50 $48,212.50

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