Question
Kohler Corporation reports the following components of stockholders equity at December 31, 2018. Common stock$20 par value, 100,000 shares authorized, 50,000 shares issued and outstanding
Kohler Corporation reports the following components of stockholders equity at December 31, 2018.
Common stock$20 par value, 100,000 shares authorized, 50,000 shares issued and outstanding | $ | 1,000,000 | |
Paid-in capital in excess of par value, common stock | 80,000 | ||
Retained earnings | 400,000 | ||
Total stockholders' equity | $ | 1,480,000 | |
During 2019, the following transactions affected its stockholders equity accounts.
Jan. | 2 | Purchased 6,000 shares of its own stock at $20 cash per share. | ||
Jan. | 5 | Directors declared a $4 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 2,250 of its treasury shares at $24 cash per share. | ||
Aug. | 22 | Sold 3,750 of its treasury shares at $17 cash per share. | ||
Sept. | 5 | Directors declared a $4 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 $368,000 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, 2019. 3. Prepare the stockholders equity section of the companys balance sheet as of December 31, 2019.
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Required 1
Journal entry worksheet 1
- Record the purchase of 6,000 shares of its own common stock for $20 cash per share.
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Journal entry worksheet 2
Record the declaration of a cash dividend of $4 per share.
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Journal entry worksheet 3
- Record the payment of the cash dividend.
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Journal entry worksheet 4
- Record the reissue of 2,250 shares of the treasury stock for $24 cash per share.
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Journal entry worksheet 5
- Record the reissue of 3,750 shares of the treasury stock for $17 cash per share.
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Journal entry worksheet 6
- Record the declaration of a cash dividend of $4 per share.
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Journal entry worksheet 7
- Record the payment of the cash dividend.
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Journal entry worksheet 8
- Record the entry to close the $368,000 credit balance (from net income) in the Income Summary account to Retained Earnings.
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Required 2
Prepare a statement of retained earnings for the year ended December 31, 2019. (Amounts to be deducted should be indicated by a minus sign.)
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Required 3
Prepare the stockholders equity section of the companys balance sheet as of December 31, 2019.
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