Problem 11-2A Cash dividends, treasury stock, and statement of retained earnings LO C3, P2, P3

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Kohler Corporation reports the following components of stockholders equity on December 31, 2013:

Common stock$20 par value, 100,000 shares authorized, 55,000 shares issued and outstanding	$	1,100,000
Paid-in capital in excess of par value, common stock		70,000
Retained earnings		430,000
Total stockholders equity	$	1,600,000

In year 2014, the following transactions affected its stockholders equity accounts.

Jan.

1

Purchased 5,500 shares of its own stock at $25 cash per share.

Jan.

5

Directors declared a $4 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record.

Feb.

28

Paid the dividend declared on January 5.

July

6

Sold 2,063 of its treasury shares at $29 cash per share.

Aug.

22

Sold 3,437 of its treasury shares at $22 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 $408,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

Problem 11-2A Part 1

Required:

1.

Prepare journal entries to record each of these transactions for 2014. Jan 1 Record the purchase 5,500 shares of its own common stock for $25 cash per share. Jan 5 Record the declaration of a cash dividend of $4 per share. Feb. 28 Record the payment of the cash dividend July 6 Record the reissue of 2,063 shares of the treasury stock for $29 cash per share. August 22 Record the reissue of 3,437 shares of the treasury stock for $22 cash per share. Sept. 5 Record the declaration of a cash dividend of $4 per share. October 28 Record the payment of the cash dividend. Dec. 31 Record the transfer of the credit balance of $408,000 in the income summary account to the retained earnings account.