Question

Kohler Corporation reports the following components of stockholders' equity at December 31, 2018. Common stock-$10 par value, 100,000 shares authorized, 60,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $ 600,000 70,000 460,000 $1,130,000 During 2019, the following transactions affected its stockholders' equity accounts. Jan. 2 Purchased 4,500 shares of its own stock at $25 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 1,688 of its treasury shares at $29 cash per share. Aug. 22 Sold 2,812 of its treasury shares at $22 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.

Answer 1

Credit Date Jan 2 Debit $112,500 [4500 x $25] $112,500 Jan 5 $333,000 [(60000-4500) $6] $333,000 Feb 28 $333,000 $333,000 July 6 $48,952 Account Title Cash Treasury Stock (To record purchase of treasury stock) Retained Earnings Dividend Payable (To record declaration of dividend) Cash Dividend Payable (To record payment of dividend) Cash Paid In Capital - Treasury Stock Treasury Stock (To record issue of treasury stock) Cash Paid In Capital - Treasury Stock Retained Earnings Treasury Stock (To record issue of treasury stock) Retained Earnings Dividend Payable (To record declaration of dividend) (1688 x $29] $6,752 [2250 x $4] $42,200 [1688 x $25] Aug 22 [2812 x $22] $61,864 $6,752 $1,684 $70,300 [2812 x $25] Sep 5 $360,000 [60000 x $6] $360,000

Oct 28 $360,000 $360,000 Cash Dividend Payable (To record payment of dividend) Income Summary Retained Earniings (To record transfer of net income to retained earnings) Dec 31 $428,000 $428,000 Kohler Company Statement of Retained Earnings For the year ended Dec 31, 2019 Beginning Balance as on Jan 1, 2019 Add: Net Income $460,000 $428,000 $888,000 ($693,000) ($1,684) $193,316 Less: Dividend Less: Treasury Stock Ending Balance as on Dec 31, 2019

Amount Amount Kohler Company Partial Balance Sheet Dec 31, 2019 Particulars Stockholders' Equity Common Stock Paid in Capital in Excess of Par - Common Stock Total Contributed Capital Retained Earnings Total Stockholders' Equity $600,000 $70,000 $670,000 $193,316 $863,316