Kohler Corporation reports the following components of stockholders’ equity on D

Question

Kohler Corporation reports the following components of stockholders’ equity on December 31, 2015:
Kohler Corporation reports the following components of stockholders' equity on December 31, 2015: Common stock-$20 par value, 100,000 shares authorized, 50,000 shares issued and outstanding Paid-in capital in excess of par value, common stoclk Retained earnings $1,000,000 80,000 400,000 Total stockholders' equity $1,480,000 In year 2016, the following transactions affected its stockholders' equity accounts. Purchased 4,500 shares of its own stock at $25 cash per share. Directors declared a $4 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record. Paid the dividend declared on January 5. Sold 1,688 of its treasury shares at $29 cash per share. Sold 2,812 of its treasury shares at $22 cash per share. Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record. Paid the dividend declared on September 5. Closed the $368,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Jan. Jan. 1 5 Feb. 28 July 6 Aug. 22 Sept. 5 Oct. 28 Dec. 31

Explanation / Answer

JOurnal Entries in the books of Kohler Corporation

DAte Particulars Amount($) Amount($) Jan1 Treasury Stock DR 112500 To CAsh 112500 (treasury stock purchased) JAn 5 Retained Earnings 182000 to Dividend payable 182000 (being cash dividend declared) Feb 28 Dividend PAyable DR 182000 TO cash 182000 (Being CAsh Diviend paid) July 6 CAsh A/c 48952 To Treasury Stock 42200 To Additional Paid in Capital 6752 (sale of treasury stock at premium) Aug 22 CAsh A/c 61864 TO Treasury stock 61864 (Being Treasury stock sold) Sep 5 Retained Earnings A/c 182000 TO Dividend PAyable A/c 182000 (Being CAsh dividend declared) Oct 28 Dividend Payable A/c 182000 To CAsh 182000 (Being CAsh dividend paid) Dec 31 Income Summary A/c 368000 To Retained Earings A/c 368000

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