Kohler Corporation reports the following components of stockholders’ equity at December 31, 2018.

During 2019, the following transactions affected its stockholders’ equity accounts.

Required

1. Prepare journal entries to record each of these transactions.

2. Prepare a statement of retained earnings for the year ended December 31, 2019.

3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2019.

Transcribed Image Text:

Common stock-$10 par value, 100,000 shares authorized, 40,000 shares issued and outstanding.. Paid-in capital in excess of par value, common stock Retained earnings...... Total stockholders' equity $400,000 60,000 270,000 $730,000 2 Purchased 4,000 shares of its own stock at $20 cash per share. Jan. Jan. 5 Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders of record. Feb. 28 Paid the dividend declared on January 5. July 6 Sold 1,500 of its treasury shares at $24 cash per share. Aug. 22 Sold 2,500 of its treasury shares at $17 cash per share. Sep. 5 Directors declared a $2 per share cash dividend payable on October 28 to the September 25 stockholders of record. Oct. 28 Paid the dividend declared on September 5. Dec. 31 Closed the $388,000 credit balance (from net income) in the Income Summary account to Re- tained Earnings.