Reference no: EM132756742

Question - Sun Corporation received a charter that authorized the issuance of 97,000 shares of $7 par common stock and 22,000 shares of $75 par, 5 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation.

Year 1 -

Jan. 5 Sold 14,550 shares of the $7 par common stock for $9 per share. 12 Sold 2,200 shares of the 5 percent preferred stock for $85 per share.

Apr. 5 Sold 19,400 shares of the $7 par common stock for $11 per share.

Dec. 31 During the year, earned $308,100 in cash revenue and paid $235,100 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 3,300 shares of the $75 par preferred stock for $95 per share.

May. 5 Purchased 500 shares of the common stock as treasury stock at $14 per share.

Dec. 31 During the year, earned $247,300 in cash revenues and paid $176,000 for cash operating expenses. 31 Declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock.

Required -

a. Organize the transaction data in accounts under an accounting equation.

b. What is the number of common shares outstanding at the end of Year 1? At the end of Year 2? How many common shares had been issued at the end of Year 1? At the end of Year 2?

c. Are there any differences between issued and outstanding common shares for Year 1 and Year 2?