Kohler Corporation
reports the following components of stockholders’ equity on
December 31, 2016:
Common stock—$20
par value, 100,000 shares authorized, 60,000 shares issued and outstanding |
$ | 1,200,000 |
Paid-in capital in excess of par value, common stock | 80,000 | |
Retained earnings | 430,000 | |
Total stockholders' equity | $ | 1,710,000 |
In year 2017, the following transactions affected its stockholders’
equity accounts.
Jan. | 1 | Purchased 5,500 shares of its own stock at $15 cash per share. | ||
Jan. | 5 | Directors declared a $6 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 2,063 of its treasury shares at $19 cash per share. | ||
Aug. | 22 | Sold 3,437 of its treasury shares at $12 cash per share. | ||
Sept. | 5 | Directors declared a $6 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
company’s balance sheet as of December 31, 2017.
Solution 1:
Kohler Corporation - Journal Entries | |||
Date | Particulars | Debit | Credit |
1-Jan | Treasury Stock A/c Dr | $82,500.00 | |
To Cash | $67,500.00 | ||
(Being 5500 shares of treasury stock purchased at $15 per share) | |||
5-Jan | Retained Earnings Dr | $327,000.00 | |
To Dividend payable [(60000 - 5500)*6] | $327,000.00 | ||
(Being dividend declared) | |||
28-Feb | Dividend Payable Dr | $327,000.00 | |
To Cash | $327,000.00 | ||
(Being dividend paid) | |||
6-Jul | Cash A/c Dr (2063*19) | $39,197.00 | |
To Treasury Stock (2063*15) | $30,945.00 | ||
To Additional Paid in Capital (2063*$4) | $8,252.00 | ||
(Being 2063 shares of treasury stock sold at $19 per share) | |||
22-Aug | Cash A/c Dr (3437*12) | $41,244.00 | |
Additional Paid in Capital A/c Dr | $8,252.00 | ||
Retained Earnings Dr (Balancing figure) | $2,059.00 | ||
To Treasury Stock (3437*$15) | $51,555.00 | ||
(Being 3437 shares of treasury stock sold at $12 per share) | |||
5-Sep | Retained Earnings Dr | $360,000.00 | |
To Dividend payable (60000*6) | $360,000.00 | ||
(Being dividend declared) | |||
28-Oct | Dividend Payable Dr | $360,000.00 | |
To Cash | $360,000.00 | ||
(Being dividend paid) | |||
31-Dec | Income summary Dr | $428,000.00 | |
To Retained Earnings | $428,000.00 | ||
(Being income transferred to retained earnings) |
Solution 2:
Kohler Corporation - Statement of Retained Earnings on 31.12.2017 | |
Particulars | Amount |
Opening balance | $430,000.00 |
Add: Income for 2018 | $428,000.00 |
$858,000.00 | |
Less: Dividend Paid (54500*$6 + 60000*$6) | -$687,000.00 |
Less: Loss on sale of treasury stock | -$2,059.00 |
Ending balance of Retained Earnings | $168,941.00 |
Solution 3:
Stockholder Equity Section of Balance sheet | |
Kohler Corporation at December 31, 2017 | |
Particulars | Amount |
Stockholders Equity: | |
Common
stock—$20 par value, 100,000 shares authorized, 60,000 shares issued and outstanding |
$1,200,000.00 |
Paid-in capital in excess of par value, common stock | $80,000.00 |
Total contributed Capital | $1,280,000.00 |
Retained Earnings | $168,941.00 |
Total Stockholder's Equity | $1,448,941.00 |
Kohler Corporation reports the following components of stockholders’ equity on December 31, 2016: Common stock—$20 par...
Kohler Corporation reports the following components of stockholders’ equity on December 31, 2016: Common stock—$20 par value, 100,000 shares authorized, 60,000 shares issued and outstanding $ 1,200,000 Paid-in capital in excess of par value, common stock 80,000 Retained earnings 430,000 Total stockholders' equity $ 1,710,000 In year 2017, the following transactions affected its stockholders’ equity accounts. Jan. 1 Purchased 5,500 shares of its own stock at $15 cash per share. Jan. 5 Directors declared a $6 per share cash dividend...
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 400,000 Total stockholders' equity $ 1,295,000 In year 2017, the following transactions affected its stockholders’ equity accounts. Jan. 1 Purchased 5,000 shares of its own stock at $20 cash per share. Jan. 5 Directors declared a $4 per share cash dividend...
Kohler Corporation reports the following components of stockholders’ equity on December 31, 2016: 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 2017, the following transactions affected its stockholders’ equity accounts. Jan. 1 Purchased 4,000 shares of its own stock at $20 cash per share. Jan. 5 Directors declared a $4 per share cash dividend...
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Kohler Corporation reports the following components of stockholders’ equity on December 31, 2016: Common stock—$15 par value, 100,000 shares authorized, 50,000 shares issued and outstanding $ 750,000 Paid-in capital in excess of par value, common stock 60,000 Retained earnings 430,000 Total stockholders' equity $ 1,240,000 In year 2017, the following transactions affected its stockholders’ equity accounts. Jan. 1 Purchased 5,500 shares of its own stock at $15 cash per share. Jan. 5 Directors declared a $6 per share cash dividend...
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Kohler Corporation reports the following components of stockholders’ equity on December 31, 2016: 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 80,000 Retained earnings 370,000 Total stockholders' equity $ 1,550,000 In year 2017, the following transactions affected its stockholders’ equity accounts. Jan. 1 Purchased 4,000 shares of its own stock at $15 cash per share. Jan. 5 Directors declared a $2 per share cash dividend...
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Kohler Corporation reports the following components of stockholders' equity on December 31, 2016: Common stock-$20 par value, 100,000 shares authorized, 55,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $1,100,000 70,000 400, 000 $1,570,000 In year 2017, the following transactions affected its stockholders' equity accounts. Jan. 1 Purchased 5,000 shares of its own stock at $20 cash per share Jan 5 Directors declared a $6 per share cash dividend payable...