Question

MENT CES Exercise 181 a-b (Part Level Submission) An inexperienced accountant for Chetola Corporation made the following entries 240,000 July 1 Cash Common Stoc iz: Chapter 13 le Choice stion 38 Hole Choice estion 13 ole Choice estion 48 le Choice estion 50 tiple Choice 02 utiple Choice (issued 15,000 shares of no por common stock, stated value $10 per share) Sept 1 Common Stock 32.000 4,000 Retained Earnings 36,000 (Purchased 2,000 shares issued on July 1 for the treasury at $18 per share) Cash 20,000 Dec ! Common Stock 16,000 Multiple choice Question Multiple choice Questions Multi Cole Orson 9 Multiple Choice Buon 102 Exercises a b (Part son) Gain on of stock 4,000 (Sold 1,000 shares of the treasury stock a 20 per share)

Answer 1

Correct Entries:

Date	Account title and Explanation	Debit	Credit
July 1	Cash	240,000
	Common stock [15,000 shares x $10 stated value]		150,000
	Paid-in capital in excess of stated value-Common stock		90,000
	[To record issuance of common stock]
Sept.1	Treasury stock [2,000 x $18 cost]	36,000
	Cash		36,000
	[To record purchase of own shares]
Dec.1	Cash [1,000 x $20]	20,000
	Treasury stock [1,000 x $18 cost]		18,000
	Paid-in excess of capital from treasury stock		2,000
	[To record sale of treasury stock]