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/ Connect Jans - x * - e a Secure | https://newconnectriheducation.com/flow/connect.htrril & * & * w. : Anrs * Backrmark: Downloard music, mo *HBI Usemame Look & Blackboard Learn D The Blacklist | Watch Owatch Movies Online E BLU Portal w Top 100 Momics of A.S How to Deactivate Prº Tool 9 TH2 war Basc Layout * Chap 8 Prob 23 O Saved Help Save & Exit Submit Check my work (The following information applies to the questions displayed below.) Part 2 of 3 Sun Corporation received a charter that authorized the issuance of 118,000 shares of $7 par common stock and 19,000 shares of $100 par, 6 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation: 2018 Jan. 5 sold 17,700 shares of the $7 par common stock for $9 per share. 12 Sold 1,980 shares of the 6 percent preferred stock for $110 per share. Apr. 5 sold 23,6ee shares of the $7 par common stock for $11 per share. Dec. 31 During the year, earned $301,500 in cash revenue and paid $237,700 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. 10 points cBook References 2019 Feb. 15 Paid the cash dividend declared on December 31, 2018. Mar. 3 sold 2,850 shares of the $108 par preferred stock for $120 per share. May. 5 Purchased 500 shares of the common stock as treasury stock at $14 per share. Dec. 31 During the year, earned $254,988 in cash revenues and paid $174,800 for cash operating expenses. 31 Declared the annual dividend on the preferred stock and a se.5e per share dividend on the common stock. Graw Mc Hill O Type here to search o e A * ENG 11/25/2017 - 228 AM EI

Explanation / Answer

Sun Corporation

Stockholders' Equity as of December 31, 2018

31-Dec-18

Capital Stock

Preferred Stock - Par value $100 per share, 6% cumulative and non-participating,

19,000 shares authorized,

1,900 shares issued and outstanding

$190,000

Common Stock

118,000 shares authorized,

41,300 shares issued and outstanding

$289,100

Total Capital Stock

$479,100

Additional Paid-in Capital

Paid-in capital in excess of par - Preferred

$19,000

Paid-in capital in excess of par - Common Stock

$129,800

$148,800

Total paid-in Capital

$627,900

Retained Earnings

$52,400

Total Stockholders' Equity

$680,300

Notes:

Retained Earnings:

Cash revenue earned $301,500

Cash operating expenses $237,700

Net income $63,800

Less: Preference dividend $11,400

Income transferred to retained earnings $52,400

17,700 shares x $2($9 -$7) = $35,400

23,600 shares x $4 ($11 - $7) = $94,400

Total = $129,800

Paid-in capital - Preferred stock:

19,000 shares x $10 ($110 - $100) = $19,000

Common Stock issued and outstanding:

(17,700 + 23,600) x $7 = $289,100

Preference dividend = 6% x $190,000 = $11,400