Question

NAME CLASS Kohler Corporation reports the following components of stockholders' equity at December 31, 2018. Common stock-$10 par value, 100,000 shares authorized, 40,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $400,000 60,000 270,000 $730,000 During 2019, the following transactions affected its stockholders' equity accounts. Jan. 2 Purchased 4,000 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 1,500 of its treasury shares at $24 cash per share. Aug. 22 Sold 2,500 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 $388,000 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 year ended December 31, 2019. 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2019. 4. Use your own paper for your answers and PLEASE be neat!!!!

Answer 1

1. Journal Entries in the Books of Kohler Corporation Date Alevint Tile and Nanation Besteca) Gork/? 02-01-18 Accant Title and Narration De bit($) Credit($) Treasury Stock Alc 80,000 . To cash Alc 80,000 Being Oun shares Bought Back by Company (4000+20 = 809000] Cash Dividend Alc. 72,000 : 72,000 To Dividend payable Ale Being Cash dividend declared by the Directors (49000 - 4006]* 2 pershare] 05-01-18 : 28-02-18 721000 Dividend Payable Ali 721000 - To Cash AlC Dividend declared Earlier was now laid 06-07-18 Cash Alc . 361000 · TO Treasury Stock ALC TO Paid -in- Capital Som Treasury Stock (being use of beasny stock @ $24 pershare] 30,000 61000

: 22-08-18 Cash Ale Retained Eamings Alc Paid-in - Capital hom Treasury Stock Alu To · Treasiny Stock Alo 42,500 1500 6000 50,000 Being Isue of Treasury stock @ Rs 17 per shame] 05-09-18 80,000 80,000 Cash Dividend AKC 80,000 to Dindend Payable Alc (Being Dividend declared @f2 per share for [40,00 – 4000 + 1500+ 2500 = 4900 shares x2 = 80,00) 728-10-18 80,000 LOOC Dindend Payable Ale TO Cash All (Dindend de chored Earler was Paid] 31-12-18 3,88100 Income Summary Alo 3,88,00 to Rettuned Eamings Being Income Summary Alo brunstered to Retuined famings and closed)

2. In the Books of Kohler Corporation 270,000 do Statement of Retuned Earnings for year Ended 31-12-2018 Partiwlars Amt (4) Balance of Retuned Eumings at the Beginning (Opening Balance) (+) Net Income during the year 3,88,000 6 Diridend Dedared and paid (11521000) - Loss on Issue of Treasury stock (1500) (warking Nere –1) Balance as on 31-12-2018 $5104,500 Amunt ($) 4100,000 60,000 bi Statement of Stock holder's Equity particulars Common Stock Paid-in-capital in Enless of Par - Contributed capital it? Retained Farmings (ou per Part-a) Total Stock holder's Equity = 1 4,60,000 5104,500

+ walkings le 22- Auq =18 21500 shares Issued @ $17 per Share Treasony Stock (215004207 - $ 531060 <> cash received (2150x17 = $42500 Loss on issue $7500 Loss (Remaining) Passed to Paid in capital form Treasury stock $ 6000 Retained Eamings $ 1500