Question
In: Accounting
Sun Corporation received a charter that authorized the issuance of 100,000 shares of $5 par common stock and 22,000 shares of $125 par, 6 percent cumulative preferred stock.
Sun Corporation received a charter that authorized the issuance of 100,000 shares of $5 par common stock and 22,000 shares of $125 par, 6 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation:
2018
| Jan. | 5 | Sold 15,000 shares of the $5 par common stock for $7 per share. | |
| 12 | Sold 2,200 shares of the 6 percent preferred stock for $135 per share. | ||
| Apr. | 5 | Sold 20,000 shares of the $5 par common stock for $9 per share. | |
| Dec. | 31 | During the year, earned $303,100 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 3,300 shares of the $125 par preferred stock for $145 per share. | |
| May. | 5 | Purchased 500 shares of the common stock as treasury stock at $10 per share. | |
| Dec. | 31 | During the year, earned $253,300 in cash revenues and paid $171,300 for cash operating expenses. | |
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 "NA" for no effect.)
Events
2018
jan 5
jan12
apr 5
dec31
dec
31
bal
2019
feb 15
mar 3
may 5
dec 31
dec 31
dec31
bal
|
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Solutions
Expert Solution
| Sun Corporation | |||||||||||||||||
| Accounting Equation | |||||||||||||||||
| Event | Asset | = | Liabilities | Stockholder's equity | |||||||||||||
| Cash | = | Dividends Payable | + | Preferred stock | + | Common Stock | + | Paid in capital in excess of preferred stock | + | Paid in capital in excess of common stock | - | Treasury stock | + | Retained earnings | Accounts Title for retained earnings | ||
| 2018 | |||||||||||||||||
| Jan-05 | $1,05,000 | = | + | + | $75,000 | + | + | $30,000 | - | + | |||||||
| Jan-12 | $2,97,000 | = | + | $2,75,000 | + | + | $22,000 | + | - | + | |||||||
| Apr-05 | $1,80,000 | = | + | + | $1,00,000 | + | + | $80,000 | - | + | |||||||
| Dec-31 | $65,700 | = | + | + | + | + | - | + | $65,700 | Net Income | |||||||
| Dec-31 | = | $16,500 | + | + | + | + | - | + | -$16,500 | Preferred dividend | |||||||
| Total | $6,47,700 | $16,500 | $2,75,000 | $1,75,000 | $22,000 | $1,10,000 | $49,200 | End. Bal | |||||||||
| 2019.00 | |||||||||||||||||
| Bal. Jan-01 | $6,47,700 | $16,500 | $2,75,000 | $1,75,000 | $22,000 | $1,10,000 | $49,200 | Beg. Bal | |||||||||
| Jul-05 | = | + | + | + | + | - | + | ||||||||||
| Feb-05 | -$16,500 | = | -$16,500 | + | + | + | + | - | + | ||||||||
| Mar-03 | $4,78,500 | = | + | $4,12,500 | + | + | $66,000 | + | - | + | |||||||
| May-05 | -$5,000 | = | + | + | + | + | - | $5,000 | + | ||||||||
| Dec-31 | $82,000 | = | + | + | + | + | - | + | $82,000 | Net Income | |||||||
| Total | $11,86,700 | $0 | $6,87,500 | $1,75,000 | $88,000 | $1,10,000 | $5,000 | $1,31,200 | End. Bal | ||||||||
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