Question
Kohler Corporation reports the following components of stockholders equity at December 31 of the prior year . Common stock$10 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$10 par value, 100,000 shares authorized, 50,000 shares issued and outstanding | $ 500,000 |
---|---|
Paid-in capital in excess of par value, common stock | 80,000 |
Retained earnings | 430,000 |
Total stockholders' equity | $ 1,010,000 |
During the current year, the following transactions affected its stockholders equity accounts.
January 2 | Purchased 6,000 shares of its own stock at $25 cash per share. |
---|---|
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 3,000 of its treasury shares at $29 cash per share. |
August 22 | Sold 3,000 of its treasury shares at $21 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 $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 current year ended December 31. 3. Prepare the stockholders equity section of the balance sheet as of December 31 of the current year.
Required 1
1. Record the purchase of 6,000 shares of its own common stock for $25 cash per share.
2. Record the declaration of a cash dividend of $2 per share.
3. Record the payment of the cash dividend.
4. Record the reissue of 3,000 shares of the treasury stock for $29 cash per share.
5. Record the reissue of 3,000 shares of the treasury stock for $21 cash per share
6. Record the declaration of a cash dividend of $2 per share.
7. Record the payment of the cash dividend.
8. Record the entry to close the $368,000 credit balance (from net income) in the Income Summary account to Retained Earnings.
Required 2
Prepare a statement of retained earnings for the current year ended December 31. (Amounts to be deducted should be indicated by a minus sign.)
|
Required 3.
Prepare the stockholders equity section of the balance sheet as of December 31 of the current year.
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started