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Art Wyatt Corporation

E3-7 Art Wyatt Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the first month, the accountant made the following entries for the corporation's capital stock.

Instructions
On the basis of the explanation for each entry, prepare the entry that should have been made for the capital stock transactions.
Date Account Debit Credit
May 2nd Cash 144,000
Capital Stock 144,000
(Issued 12,000 shares of $5 par value common stock ant $12 per share)

Date Account Debit Credit
May 10th Cash 600,000
Capital Stock 600,000
(Issued 10,000 shares of $50 par value preferred stock at $60 per share)

Date Account Debit Credit
May 15th Capital Stock 14,000
Cash 14,000
(Purchased 1,000 shares of common stock for the treasury at $14 per share)

Date Account Debit Credit
31-May Cash 7,500
Capital Stock 2,500
Gain on Sale of Stock 5,000
(Sold 500 shares of treasury stock at $15 per share)

Attachments

Solution Summary

The solution includes an excel sheet that shows the General Ledger presentation of Capital Stock Transactions for Art Wyatt Corporation.
Problem: E3-7 Art Wyatt Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the first month, the accountant made the following entries for the corporation's capital stock

$2.19