Question
Kohler Corporation reports the following components of stockholders equity on December 31, 2016: Common stock$15 par value, 100,000 shares authorized, 55,000 shares issued and outstanding
Kohler Corporation reports the following components of stockholders equity on December 31, 2016:
| Common stock$15 par value, 100,000 shares authorized, 55,000 shares issued and outstanding | $ | 825,000 |
| Paid-in capital in excess of par value, common stock | 70,000 | |
| Retained earnings | 460,000 | |
| Total stockholders' equity | $ | 1,355,000 |
In year 2017, the following transactions affected its stockholders equity accounts.
| Jan. | 1 | Purchased 6,000 shares of its own stock at $20 cash per share. | ||
| 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 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 $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 $428,000 credit balance (from net income) in the Income Summary account to Retained Earnings. |
Required: 1. Prepare journal entries to record each of these transactions for 2017. 2. Prepare a statement of retained earnings for the year ended December 31, 2017. 3. Prepare the stockholders' equity section of the companys balance sheet as of December 31, 2017.
Journal Entries
1. Record the purchase of 6,000 shares of its own common stock for $20 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 2,250 shares of the treasury stock for $24 cash per share.
5. Record the reissue of 3,750 shares of the treasury stock for $17 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 income summary account having a credit balance of $428,000.
Prepare a statement of retained earnings for the year ended December 31, 2017. (Amounts to be deducted should be indicated by a minus sign.)
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Prepare the stockholders' equity section of the companys balance sheet as of December 31, 2017
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Fundamental accounting principle
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
21st edition
978-0078025587
