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Kohler Corporation reports the following components of stockholders equity at December 31 of the prior year . Common stock$20 par value, 100,000 shares authorized, 50,000
Kohler Corporation reports the following components of stockholders equity at December 31 of the prior year.
Common stock$20 par value, 100,000 shares authorized, 50,000 shares issued and outstanding | $ 1,000,000 |
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Paid-in capital in excess of par value, common stock | 80,000 |
Retained earnings | 460,000 |
Total stockholders' equity | $ 1,540,000 |
During the current year, the following transactions affected its stockholders equity accounts.
January 2 | Purchased 4,000 shares of its own stock at $15 cash per share. |
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January 5 | Directors declared a $2 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 2,000 of its treasury shares at $19 cash per share. |
August 22 | Sold 2,000 of its treasury shares at $11 cash per share. |
September 5 | Directors declared a $2 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:
- Prepare journal entries to record each of these transactions.
- Prepare a statement of retained earnings for the current year ended December 31.
- Prepare the stockholders equity section of the balance sheet as of December 31 of the current year.
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