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$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 60,000

Retained earnings 400,000

Total stockholders' equity $1,460,000

During 2020, the following transactions affected its stockholders' equity accounts.

Jan.2Purchased 5,500 shares of its own stock at $20 cash per share.

Jan.5Directors declared a $6 per share cash dividend payable on February 28 to the February 5 stockholders of record.

Feb.28Paid the dividend declared on January 5.

July6Sold 2,063 of its treasury shares at $24 cash per share.

Aug.22Sold 3,437 of its treasury shares at $17 cash per share.

Sept.5Directors declared a $6 per share cash dividend payable on October 28 to the September 25 stockholders of record.

Oct.28Paid the dividend declared on September 5.

Dec.31Closed 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.

2.Prepar 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.

Complet this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 3

Required 1

1.Prepare journal entries to record each of these transactions.

Required 2

Prepar a statement of retained earnings for the year ended December 31, 2020.(Amounts to be deducted should be indicated by a minus sign.)

KOHLER CORPORATION

Statement of Retained Earnings

For Year Ended December 31, 2020

• 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