Sun Corporation received a charter that authorized the issuance of 98,000 shares of $3 par common stock and 22,000 shares of $125 par, 7 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation. Year 1 January 5 Sold 14,700 shares of the $3 par common stock for $5 per share. January 12 Sold 2,200 shares of the 7 percent preferred stock for $135 per share. April 5 Sold 19,600 shares of the $3 par common stock for $7 per share. December 31 During the year, earned $307,800 in cash revenue and paid $242,500 for cash operating expenses. December 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. December 31 Closed the revenue, expense, and dividend accounts to the retained earnings account. Year 2 February 15 March 3 May 5 Purchased 400 shares of the common stock as treasury stock at $6 per share. December 31 During the year, earned $246,100 in cash revenues and paid $173,500 for cash operating expenses. December 31 Declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock. December 31 Closed revenue, expense, and dividend accounts to the retained earnings account. Required a. Prepare journal entries for these transactions for Year 1 and Year 2 and post them to T-accounts. Paid the cash dividend declared on December 31, Year 1. Sold 3,300 shares of the $125 par preferred stock for $145 per share.
Sun Corporation received a charter that authorized the issuance of 98,000 shares of $3 par common stock and 22,000 shares of $125 par, 7 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation. Year 1 January 5 Sold 14,700 shares of the $3 par common stock for $5 per share. January 12 Sold 2,200 shares of the 7 percent preferred stock for $135 per share. April 5 Sold 19,600 shares of the $3 par common stock for $7 per share. December 31 During the year, earned $307,800 in cash revenue and paid $242,500 for cash operating expenses. December 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. December 31 Closed the revenue, expense, and dividend accounts to the retained earnings account. Year 2 February 15 March 3 May 5 Purchased 400 shares of the common stock as treasury stock at $6 per share. December 31 During the year, earned $246,100 in cash revenues and paid $173,500 for cash operating expenses. December 31 Declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock. December 31 Closed revenue, expense, and dividend accounts to the retained earnings account. Required a. Prepare journal entries for these transactions for Year 1 and Year 2 and post them to T-accounts. Paid the cash dividend declared on December 31, Year 1. Sold 3,300 shares of the $125 par preferred stock for $145 per share.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
168.
Subject : - Accounting
Transcribed Image Text:Sun Corporation received a charter that authorized the issuance of 98,000 shares of $3 par common stock and 22,000 shares of $125 par, 7 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two
years of operation.
Year 1
January 5
Sold 14,700 shares of the $3 par common stock for $5 per share.
January 12
Sold 2,200 shares of the 7 percent preferred stock for $135 per share.
April 5
Sold 19,600 shares of the $3 par common stock for $7 per share.
December 31 During the year, earned $307,800 in cash revenue and paid $242,500 for cash operating expenses.
December 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.
December 31
Closed the revenue, expense, and dividend accounts to the retained earnings account.
Year 2
February 15
March 3
Paid the cash dividend declared on December 31, Year 1.
Sold 3,300 shares of the $125 par preferred stock for $145 per share.
May 5
Purchased 400 shares of the common stock as treasury stock at $6 per share.
December 31 During the year, earned $246,100 in cash revenues and paid $173,500 for cash operating expenses.
December 31 Declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock.
December 31 Closed revenue, expense, and dividend accounts to the retained earnings account.
Required
a. Prepare journal entries for these transactions for Year 1 and Year 2 and post them to T-accounts.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education