Aoct 201-Final Exam (1) Sun Corporation was authorized to issue 50,000 shares of

Question

Aoct 201-Final Exam (1) Sun Corporation was authorized to issue 50,000 shares of $10 par common stock and 50,000 shares of $50 par, 5 percent, cumulative preferred stock. Mallard Corporation completed the following transactions during its first two years of operation: 60000 pOr 90,000 Foid 2014 Jan. 5 Issued 6,000 shares of S10 par common stock for $15 per share.-2 De.31 During the yea ,0 f sre a d$,00 fenting 12 5 Issued 1,000 shares of the 5% preferred stock fr$55 per share. Issued 30,000 shares of S10 par common stock for $21 per share. Apr. Declared the cash dividend on outstanding shares of preferred stock for 2014. The dividend will be paid on January 31 to stockholders of record on January 15, 2015. 31 2015 Jan. 31 Paid the cash dividend declared on December 31, 2014. Mar. 3 Issued 15,000 shares of $50 par preferred stock for $53 per share. May 5 Purchased 900 shares of common stock as treasury stock at $24 per share. Dec. 31 During the year, earned $210,000 of cash revenues and paid $98,000 of cash operating 31 Declared the dividend on the preferred stock and a $0.50 per share dividend on the common stock Required All questions below refer to the ending balances in the Balance Sheet accounts at 12/31/15. a) What amount appears in the Common Stock account on the 12/31/15 balance sheet? b) What amount appears in the Preferred Stock account on the 12/31/15 balance sheet? (Continued next page

Explanation / Answer

d. Additional paid in capital for preferred stock

e. Retained earnings

Balance in the retained earnings account on 12/31/15 = $113950

f. No. of shares of common stock authorized on 12/31/15 = 50000

No. of shares of common stock issued 12/31/15 = 6000+30000 = 36000

No. of shares of common stock outstanding 12/31/15 = 6000+30000-900 = 35100

Additional paid in capital on: Jan 12, 2014 - 1000 shares x $5 $5000 Mar 3, 2015 - 15000 shares x $3 45000 Additional paid in capital account for preferred stock on 12/31/15 balance sheet $50000

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