Exercise 11-5

 

 

 

 

Your answer is correct.

 

 

Tofias 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, he made the following entries for the corporation’s
capital stock.

May 2

 

Cash

 

102,310

 
 

 
 

    Capital Stock

 
 
 

102,310

 
 

       (Issued 7,870 shares
of $10 par value common stock at $13 per share)

 
 
 
 

10

 

Cash

 

706,860

 
 

 
 

    Capital Stock

 
 
 

706,860

 
 

       (Issued 13,860 shares
of $18 par value preferred stock at $51 per share)

 
 
 
 

15

 

Capital Stock

 

7,540

 
 

 
 

    Cash

 
 
 

7,540

 
 

       (Purchased 580 shares
of common stock for the treasury at $13 per share)

 
 
 
 

On the basis of the explanation for each entry, prepare the entries
that should have been made for the capital stock transactions.
(Record entries in the order displayed in the problem
statement. Credit account titles are automatically indented when
amount is entered. Do not indent manually.)