Question

Kohler Corporation reports the following components of stockholders' equity on December 31, 2016 $ Common stock-$15 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 80,000 480,000 1,230,000 $ In year 2017, the following transactions affected its stockholders' equity accounts. Jan. 1Purchased 4,500 shares of its own stock at $20 cash per share. Jan. 5 Directors declared a $4 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 65old 1,688 of its treasury shares at $24 cash per share. Aug. 22 Sold 2,812 of its treasury shares at $17 cash per share. Sept. 5 Directors declared a $4 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 for 2017 2. Prepare a statement of retained earnings for the year ended December 31, 2017 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2017 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 for 2017. View transaction list Journal entry worksheet 2 3 4 5 6 7 8 Record the purchase of 4,500 shares of its own common stock for $20 cash per share. Note: Enter debits before credits. Date General Journal Debit Credit Jan 01

Answer 1

Page No 0 Answer o winal entries On Jan 1, - Treasury stock = 4500 x $ 20 = $90,000 On Jan 5, Retained carnings = (50,000 - 4500) * $4 = $182000 On Julys, Cash. = 1688 x $24 = $40512 Treasury stock, common = $ 1688 x ¢ão - $ 33760 Paid is capital - 40512 - 33760- $ 6752 On Aug 22; - Cash : 0812 x$1+ = $. 44804 Tacasury stock, common = 2812 * $ 220 56240 Retained canning -47804 – 6752 +56240 = $1684

Page No Credit $90,000 $182000 $ 182000 33760 On Sep 5, Retained earnings = 50,000 X4 = $200,000 Date Particular Debit Jant Treasury stock, common $ 90,000 cash Fan-5: Retained earnings $182000 Common dividend payable Feb-28 Commen divickend payable $182000 . Cash July-6 . . Cash $ 40512 Treasury stock, common Pait-in capital , Treasury stock Aug aal $ 47804 Paid in capital Treasury stock $6752 Relauned earnings $ 1684 Treasury stock, common sep 5 Retained earnings $ 200,000 Common dividend payable oct as common dividend payable $200,000 A cash $398000 Retained earnings $6752 $ 56:40 $200,000 $ 200,000 Income Summary Idec 31 $388000

Page No ③ @ Statement of gretained carrings awwww Particular Refaised earnings, Dec 31, 2016 Net income Amount $400,000 $ 388000 Cash dividends declared Treasury ofock Scissuances Retained earnings dec 31, 2017 $788000 C $382000) C$ 1684) 404316 ☺ In above, cask dividends declared = 180000 + 200,000 = $382000 Stockholden cautin section of the balance sheet Particular Amount Common fock - $15 par vakre $750,000 Poid in capital in excess of par , common stock $80,000 Total contributed Capital $830,000 Retained earnings $ 404316 Total stock holders equity $1234316