Question

Kohler Corporation reports the following components of stockholders' equity at December 31, 2018 Common stock-515 par value, 100,000 shares authorized, 50,000 shares issued and outstanding Paid in capital in excess of par value, common stock Retained earnings Total stockholders' equity $ 750,000 79.000 400,000 $1,220,000 During 2019, the following transactions affected its stockholders' equity accounts. Jan. 2 Purchased 4,000 shares of its own stock at $25 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 $29 cash per share. Aug. 22 Sold 2.500 of its treasury shares at $22 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3

Answer 1

1
Date	General Journal	Debit	Credit
2-Jan	Treasury stock, Common	100,000		=4000*25
	Cash		100,000
5-Jan	Retained earnings	92,000		=(50000-4000)*2
	Common dividend payable		92,000
28-Feb	Common dividend payable	92,000
	Cash		92,000
6-Jul	Cash	43,500		=1500*29
	Treasury stock, Common		37,500	=1500*25
	Paid-in capital, Treasury stock		6,000
22-Aug	Cash	55,000		=2500*22
	Paid-in capital, Treasury stock	6,000
	Retained earnings	1,500
	Treasury stock, Common		62,500	=2500*25
5-Sep	Retained earnings	100,000		=50000*2
	Common dividend payable		100,000
28-Oct	Common dividend payable	100,000
	Cash		100,000
31-Dec	Income summary	388,000
	Retained earnings		388,000
2
	KOHLER CORPORATION
	Statement of Retained Earnings
	For Year Ended December 31, 2019
	Retained earnings, Dec. 31, 2018	400,000
	Add: Net income	388,000
		788,000
	Less: Cash dividends declared	(192,000)
	Less: Treasury stock reissuances	(1,500)
	Retained earnings, Dec. 31, 2019	594,500
3
	KOHLER CORPORATION
	Stockholders' Equity Section of the Balance Sheet
	December 31, 2019
	Common stock - $15 par value	750,000
	Paid-in capital in excess of par value, common stock	70,000
	Total contributed capital	820,000
	Retained earnings	594,500
	Total stockholders' equity	1,414,500