Question

Kohler Corporation reports the following components of stockholders’ equity at December 31, 2018.

Common stock—$20 par value, 100,000 shares authorized, 50,000 shares issued and outstanding	$	1,000,000
Paid-in capital in excess of par value, common stock		60,000
Retained earnings		430,000
Total stockholders' equity	$	1,490,000

During 2019, the following transactions affected its stockholders’ equity accounts.

Jan.		2		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.
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.

rial Problem newconnect.mheducation.com/flow/connect.html CH13 Serial Problem O Kohler Corporation reports the following components of stockholders' equity at December 31, 2018. Common stock-$20 par value, 180,000 shares authorized, 50,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders equity $1,000,000 60,000 430,000 $1,490,000 During 2019, the following transactions affected its stockholders equity accounts. 2 Purchased 5,500 shares of its own stock at $15 cash per share 5 Directors declared a $6 per share cash dividend payable on February 28 to the February 5 stockholders of record. 28 Paid the dividend declared on banuary 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. 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 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 Prepare journal entries to record each of these transactions. View transaction list

Answer 1

Kohler Corporation Journal Enteries Date Particulars 2.1.2019 Treasury Shares a/c Dr. To Cash (Treasury shares purchased) 5500 x 15 Debit in $ Credit in $ 82500 82500 Statement of Retained Earnings For the period ending 31.12.2019 Beginning Balance Add: Income Summary 430000 428000 858000 -567000 5.1.2019 267000 Less: Cash Dividends Treasury sold Ending Balance Cash Dividend a/c Dr. To Dividend Payable (Dividend declared) (50000 - 5500) x 6 -2059 267000 288941 Dr. 267000 28.2.2019 Dividend Payable a/c To Cash (Dividend paid) 267000 6.7.2019 39197 Cash a/c Dr. To Treasury Shares To Paid-in capital in excess of par value - Treasury (Treasury shares sold) 2063 x 19 = 39197; 2063 x 15 = 82500 30945 8252 Dr. 22.8.2019 Cash a/c Paid-in capital in excess of par value - Treasury a/c Dr. Retained earnings a/c Dr. To Treasury Shares (Treasury shares sold) 3437 x 15 = 51555; 3437 x 12 = 41244 41244 8252 2059 51555 5.9.2019 300000 Cash Dividend a/c Dr. To Dividend Payable (Dividend declared) (50000 - 5500 + 2063 +3437) x 6 300000 Dr. 300000 28.10.2019 Dividend Payable a/c To Cash (Dividend paid) 300000 Dr. 428000 31.12.2019 Income Summary a/c To Retained Earnings (Profits Transferred) 428000 Dr. 567000 31.12.2019 Retained earnings a/c To Cash Dividends (Dividends charged to Retained Earnings) 567000 Balance sheet - Partial As at 31.12.2019 Stockholders Equity: Common stock-$20 par value, 100,000 shares authorized, 50,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Total Contributed Capital Retained earnings Total stockholders' equity 1000000 60000 1060000 288941 1348941