7.18 14 points Problem 11-2A (Algo) Cash dividends, treasury stock, and statement of retained earnings LO C3, P2, P3 Kohler Corporation reports the following components of stockholders' equity at December 31, 2019. Common stock-$10 par value, 100,000 shares authorized, 55,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings $ 550,000 70,000 400,000 Total stockholders' equity $ 1,020,000 During 2020, the following transactions affected its stockholders' equity accounts. January 2 Purchased 4,500 shares of its own stock at $15 cash per share. January 5 Directors declared a $6 per share cash dividend payable on February 28 to the February 5 stockholders of record. February 28 Paid the dividend declared on January 5. July 6 Sold 1,688 of its treasury shares at $19 cash per share. August 22 Sold 2,812 of its treasury shares at $12 cash per share. September 5 Directors declared a $6 per share cash dividend payable on October 28 to the September 25 stockholders of record. October 28 Paid the dividend declared on September 5. December 31 Closed the $388,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Required: 1. Prepare journal entries to record each of these transactions. 2. Prepare a statement of retained earnings for the year ended December 31, 2020. 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2020. 1 January 02 Treasury stock, Common Cash 67,500 67,500 N 2 January 05 Retained earnings 303,000 Common dividend payable 303,000 3 3 February 28 Common dividend payable Cash 303,000 303,000 4 July 06 Cash Treasury stock, Common Paid-In capital, Treasury stock 5 5 August 22 Cash Paid-In capital, Treasury stock Retained earnings Treasury stock, Common 32,072 30,384 1,688 33,744 1,672 1,672 X 37,104 6 6 September 05 Retained earnings 330,000 Common dividend payable 330,000 7 October 28 Common dividend payable Cash 330,000 330,000 ( 8 December 31 Income summary Retained earnings > > 0 0 2. Prepare a statement of retained earnings for the year ended December 31, 2020. 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2020. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a statement of retained earnings for the year ended December 31, 2020. Note: Amounts to be deducted should be indicated by a minus sign. KOHLER CORPORATION Statement of Retained Earnings For Year Ended December 31, 2020 Beginning retained earnings Add: Net income Less: Cash dividends declared Less: Treasury stock reissuances Ending retained earnings $ 400,000 388,000 788,000 $ 788,000 < Required 1 Required 3 > ww 3113 July 6 Sold 1,688 of its treasury shares at $19 cash per share. August 22 Sold 2,812 of its treasury shares at $12 cash per share. September 5 Directors declared a $6 per share cash dividend payable on October 28 to the September 25 stockholders of record. October 28 Paid the dividend declared on September 5. December 31 Closed the $388,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Required: 1. Prepare journal entries to record each of these transactions. 2. Prepare a statement of retained earnings for the year ended December 31, 2020. 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2020. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2020. KOHLER CORPORATION Stockholders' Equity Section of the Balance Sheet December 31, 2020 Common stock $10 par value Paid-in capital in excess of par value, common stock Total contributed capital Retained earnings Total stockholders' equity $ 550,000 70,000 620,000 0 $ 620,000