Question

(The following information applies to the questions displayed below) Kohler Corporation reports the following components of stockholders' equity on December 31, 2015 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 In year 2016, the following transactions affected its stockholders' equity accounts. Jan. 1Purchased 4,000 shares of its own stock at $20 cash per share Jan 5 Directors declared a $2 per share cash dividend payable on Feb. 28 to the Feb. 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 52 per share cash dividend payable on October 28 to the September 25 stockholders or record Oct 28 Paid the dividend declared on September 5 Dec. 31 Closed the 5388.000 credit balance from net income in the income Summary account to Retained Earnings

Answer 1

Journal Entries:

Date	Account Titles and Explanations	Debit	Credit
Jan. 1	Treasury Stock (4,000 shares * $20 per share)	$80,000
	Cash		$80,000
	(To record the purchase of treasury stock)
Jan. 5	Dividends	$72,000
	Dividends Payable (40,000 - 4,000 = 36,000 shares * $2)		$72,000
	(To record the declaration of cash dividends)
Feb. 28	Dividends Payable	$72,000
	Cash		$72,000
	(To record the payment of cash dividends)
Jul. 6	Cash (1,500 shares * $24 per share)	$36,000
	Common Stock (1,500 shares * $20 per share)		$30,000
	Paid-in Capital in Excess of Par Value - Common Stock (1,500 * $4)		$6,000
	(To record the issue of 1,500 shares from treasury)
Aug. 22	Cash (2,500 shares * $17 per share)	$42,500
	Paid-in Capital in Short of Par Value - Common Stock (2,500 * $3)	$7,500
	Common Stock (2,500 shares * $20 per share)		$50,000
	(To record the issue of 2,500 shares from treasury)
Sept. 5	Dividends	$80,000
	Dividends Payable (40,000 - 4,000 + 1,500 + 2,500 = 36,000 shares * $2)		$80,000
	(To record the declaration of cash dividends)
Oct. 28	Dividends Payable	$80,000
	Cash		$80,000
	(To record the payment of cash dividends)
Dec. 31	Income Summary	$388,000
	Retained Earnings		$388,000
	(To close the net income to retained earnings)