Cash............. VI. An inexperienced accountant for Otto Corporation made the following entries: July 1 210,000+ Share Capital-Ordinary......... 210,000+ (Issued 15,000 no-par ordinary shares, stated value $10 per share)< Sept. 1 Share Capital-Ordinary. 28,000+ Retained Earnings 6,000+ Cash................ 34,000+ (Purchased 2,000 treasury shares (issued on July 1) at $17 per share)+ Dec. 1 Cash............ Share Capital-Ordinary....... Gain on Sale of Shares. (Sold 1,000 treasury shares at $20 per share)+ 20,000+ 14,000+ 6,000+ Instructions (18%) (a) Based on the explanation for each entry, prepare the entry that should have been made for the transactions. (Omit explanations.) (b) Prepare the correcting entries that should be made to correct the accounts of Otto Corporation. (Do not reverse the original entry.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Cash.............
VI. An inexperienced accountant for Otto Corporation made the following entries:
July 1
210,000+
Share Capital-Ordinary.........
210,000+
(Issued 15,000 no-par ordinary shares, stated value $10 per share)<
Sept. 1
Share Capital-Ordinary.
28,000+
Retained Earnings
6,000+
Cash................
34,000+
(Purchased 2,000 treasury shares (issued on July 1) at $17 per share)+
Dec. 1
Cash............
Share Capital-Ordinary.......
Gain on Sale of Shares.
(Sold 1,000 treasury shares at $20 per share)+
20,000+
14,000+
6,000+
Instructions (18%)
(a) Based on the explanation for each entry, prepare the entry that should have been
made for the transactions. (Omit explanations.)
(b) Prepare the correcting entries that should be made to correct the accounts of Otto
Corporation. (Do not reverse the original entry.)
Transcribed Image Text:Cash............. VI. An inexperienced accountant for Otto Corporation made the following entries: July 1 210,000+ Share Capital-Ordinary......... 210,000+ (Issued 15,000 no-par ordinary shares, stated value $10 per share)< Sept. 1 Share Capital-Ordinary. 28,000+ Retained Earnings 6,000+ Cash................ 34,000+ (Purchased 2,000 treasury shares (issued on July 1) at $17 per share)+ Dec. 1 Cash............ Share Capital-Ordinary....... Gain on Sale of Shares. (Sold 1,000 treasury shares at $20 per share)+ 20,000+ 14,000+ 6,000+ Instructions (18%) (a) Based on the explanation for each entry, prepare the entry that should have been made for the transactions. (Omit explanations.) (b) Prepare the correcting entries that should be made to correct the accounts of Otto Corporation. (Do not reverse the original entry.)
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