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Sun Corporation received a charter that authorized the issuance of 80,000 shares of $6 par common stock and 20,000 shares of $100 par, 8 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation. Year 1 Jan. 5 Sold 12,000 shares of the $6 par common stock for $8 per share. 12 Sold 2,000 shares of the 8 percent preferred stock for $110 per share. Apr. 5 Sold 16,000 shares of the $6 par common stock for $10 per share. Dec.31 During the year, earned $318,500 in cash revenue and paid $238,300 for cash operating expenses. 31 Declared the cash dividend on the outstanding shares of preferred stock for Year 1. The dividend will be paid on February 15 to stockholders of record on January 10, Year 2. Year 2 Feb. 15 Paid the cash dividend declared on December 31, Year 1. Mar. 3 Sold 3,000 shares of the $100 par preferred stock for $120 per share. May. 5 Purchased 400 shares of the common stock as treasury stock at $12 per share. Dec.31 During the year, earned $254,500 in cash revenues and paid $178,600 for cash operating 31 expenses. Declared the annual dividend on the preferred stock and a $0.75 per share dividend on the common stock.

Sun Corporation received a charter that authorized the issuance of 80,000 shares of $6 par common stock and 20,000 shares of $100 par, 8 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation. Year 1 Jan. 5 Sold 12,000 shares of the $6 par common stock for $8 per share. 12 Sold 2,000 shares of the 8 percent preferred stock for $110 per share. Apr. 5 Sold 16,000 shares of the $6 par common stock for $10 per share. Dec.31 During the year, earned $318,500 in cash revenue and paid $238,300 for cash operating expenses. 31 Declared the cash dividend on the outstanding shares of preferred stock for Year 1. The dividend will be paid on February 15 to stockholders of record on January 10, Year 2. Year 2 Feb. 15 Paid the cash dividend declared on December 31, Year 1. Mar. 3 Sold 3,000 shares of the $100 par preferred stock for $120 per share. May. 5 Purchased 400 shares of the common stock as treasury stock at $12 per share. Dec.31 During the year, earned $254,500 in cash revenues and paid $178,600 for cash operating 31 expenses. Declared the annual dividend on the preferred stock and a $0.75 per share dividend on the common stock.

Financial Accounting
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter13: Corporations: Organization, Stock Transactions, And Dividends
Section: Chapter Questions
Problem 3PA: The following selected accounts appear in the ledger of EJ Construction Inc. at the beginning of the...
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Sun Corporation received a charter that authorized the issuance of 80,000 shares of $6 par common stock and 20,000 shares of $100 par, 8 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation. Year 1 Jan. 5 Sold 12,000 shares of the $6 par common stock for $8 per share. 12 Sold 2,000 shares of the 8 percent preferred stock for $110 per share. Apr. 5 Sold 16,000 shares of the $6 par common stock for $10 per share. Dec.31 During the year, earned $318,500 in cash revenue and paid $238,300 for cash operating expenses. 31 Declared the cash dividend on the outstanding shares of preferred stock for Year 1. The dividend will be paid on February 15 to stockholders of record on January 10, Year 2. Year 2 Feb. 15 Paid the cash dividend declared on December 31, Year 1. Mar. 3 Sold 3,000 shares of the $100 par preferred stock for $120 per share. May. 5 Purchased 400 shares of the common stock as treasury stock at $12 per share. Dec.31 During the year, earned $254,500 in cash revenues and paid $178,600 for cash operating expenses. 31 Declared the annual dividend on the preferred stock and a $0.75 per share dividend on the common stock. Assets Cash Total assets Liabilities Dividends payable Balance Sheet As of December 31, Year 1 Total liabilities Stockholders' equity Common stock Preferred stock Paid-in capital in excess of par-preferred stock Paid-in capital in excess of par-common stock Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity S 0 $ 0 0 0 0
Transcribed Image Text:Sun Corporation received a charter that authorized the issuance of 80,000 shares of $6 par common stock and 20,000 shares of $100 par, 8 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation. Year 1 Jan. 5 Sold 12,000 shares of the $6 par common stock for $8 per share. 12 Sold 2,000 shares of the 8 percent preferred stock for $110 per share. Apr. 5 Sold 16,000 shares of the $6 par common stock for $10 per share. Dec.31 During the year, earned $318,500 in cash revenue and paid $238,300 for cash operating expenses. 31 Declared the cash dividend on the outstanding shares of preferred stock for Year 1. The dividend will be paid on February 15 to stockholders of record on January 10, Year 2. Year 2 Feb. 15 Paid the cash dividend declared on December 31, Year 1. Mar. 3 Sold 3,000 shares of the $100 par preferred stock for $120 per share. May. 5 Purchased 400 shares of the common stock as treasury stock at $12 per share. Dec.31 During the year, earned $254,500 in cash revenues and paid $178,600 for cash operating expenses. 31 Declared the annual dividend on the preferred stock and a $0.75 per share dividend on the common stock. Assets Cash Total assets Liabilities Dividends payable Balance Sheet As of December 31, Year 1 Total liabilities Stockholders' equity Common stock Preferred stock Paid-in capital in excess of par-preferred stock Paid-in capital in excess of par-common stock Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity S 0 $ 0 0 0 0
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