blems Help Save & Exi Kohler Corporation reports the following components of sto

Question

blems Help Save & Exi Kohler Corporation reports the following components of stockholders' equity on December 31 Common stock-$25 par value, 100,ee8 shares authorized, 55,800 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders equity $1,375,080 80,000 438,898 $1,885,0ee In year 2018, the following transactions affected its stockholders' equity accounts. Jan. 1 Purchased 4,e00 shares of its own stock at $2e cash per share. Dan. 5 Directors declared a $4 per shar Feb. 28 Paid the dividend declared on January s, uly 6 Sold 1,588 of its treasury shares at $24 cash per share. Aug. 22 Sold 2,5e0 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 e cash dividend payable on February 28 to the February 5 stockholders of record. the $488,888 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 2018 2. Prepare a statement of retained earnings for the year ended December 31, 2018. 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2018. earch

Explanation / Answer

Journal entries: Date Accounts title and explanation Debit $ Credit $ 1-Jan Treasury stock Dr. (4000*20) 80000     Cash account 80000 5-Jan Dividend Account Dr. 204000    Dividend payable (51000*4) 204000 28-Feb Dividend payable Dr. 204000    Cash account 204000 6-Jul Cash account Dr. (1500*24) 36000    Treasury Sstock Account (1500*20) 30000     Paid in capital-Treasury 6000 22-Aug Cash account Dr. (2500*17) 42500 Paid in capital-Treasaury Account Dr. 6000 Retained earnings Dr. 1500     Treasury Stock (2500*20) 50000 5-Sep Dividend Account Dr. 220000    Dividend payable (55000*4) 220000 28-Oct Dividend payable Dr. 220000    Cash account 220000 31-Oct Income Summary Dr. 408000    Retained earnings 408000 Statement of Retianed earnings: Beginning balance of Retained earnings 430000 Add: Net Income 408000 838000 Less: Dividend paid 424000 Less: Loss in treasury stock 1500 Ending balance in Retained earnings 412500 Statement of Stockkholder's Equity: Common Stock 100,000 shares authorised 55000 shares issued and outstanding 1375000 Paid in capital 80000 Total paid in capital 1455000 Add: Retained earnings 412500 Stockholder's equity at the end 1867500

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