. Compute the dividend yield for each of these four separate companies. Kohler C
ID: 2538433 • Letter: #
Question
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Compute the dividend yield for each of these four separate companies.
Kohler Corporation reports the following components of stockholders’ equity on December 31, 2016:
In year 2017, the following transactions affected its stockholders’ equity accounts.
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.
Record the purchase of 5,000 shares of its own common stock for $20 cash per share.
Record the declaration of a cash dividend of $2 per share.
Record the payment of a cash dividend.
Record the reissue of 1,875 shares of the treasury stock for $24 cash per share.
Record the reissue of 3,125 shares of the treasury stock for $17 cash per share.
Record the declaration of a cash dividend of $2 per share.
Record the payment of a cash dividend.
Record the entry to close the income summary account having a credit balance of $388,000.
Prepare a statement of retained earnings for the year ended December 31, 2017. (Amounts to be deducted should be indicated by a minus sign.)
Prepare the stockholders' equity section of the company’s balance sheet as of December 31, 2017.
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Company Annual Cash Dividend per Share Market Valueper Share 1 $ 12.00 $ 193.55 2 9.00 107.14 3 7.90 73.15 4 1.80 129.70
Explanation / Answer
Solution:
Problem --- Kohler Corporation
Part 1 --- Journal Entries
Date
General Journal
Debit
Credit
Jan.1
Treasury Stock (5000 Shares x $20)
$100,000
Cash
$100,000
Jan.5
Retained Earnings
$80,000
Dividend Payable (40,000 Shares x $2)
$80,000
(Number of Shares Outstanding as on Jan.5 = 45,000 Shares beg - Treasury Stock 5000 = 40,000 shares)
Feb.28
Dividend Payable
$80,000
Cash
$80,000
July.6
Cash (1875 Shares x 24)
$45,000
Treasury Stock (1875 Shares x Cost $20)
$37,500
Additional Paid in Capital from Treasury Stock (Bal. fig.)
$7,500
Aug.22
Cash (3125 Shares x $17)
$53,125
Additional Paid in Capital from Treasury Stock
$7,500
Retained Earnings (Bal. Fig)
$1,875
Treasury Stock (3125 Shares x Cost $20)
$62,500
Sept.5
Retained Earnings
$90,000
Dividend Payable (45,000 Shares x $2)
$90,000
(Number of Shares Outstanding as on Sept.5 = 40,000 shares + 1875 + 3125 = 45,000 Shares)
Oct.28
Dividend Payable
$90,000
Cash
$90,000
Dec.31
Income Summary
$388,000
Retained Earnings
$388,000
Part 2 --- Statement of Retained Earnings
Retained Earnings Statement
December 31, 2018
Retained Earnings , January 1, 2017
$460,000
Add: Income for Year 2018
$388,000
$848,000
Less: Treasury Stock adjustment
-$1,875
Less: Dividends Paid (80,000 + 90,000)
-$170,000
Retained Earnings, December 31, 2018
$676,125
Part 3 --- Stockholders Equity Section
Common stock—$20 par value, 100,000 shares authorized,
45,000 shares issued and outstanding
$900,000
Paid in Capital in Excess of par value, common stock
$60,000
Total Contributed Capital
$960,000
Retained Earnings (as calculated in part 2)
$676,125
Total Stockholders’ Equity
$1,636,125
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Date
General Journal
Debit
Credit
Jan.1
Treasury Stock (5000 Shares x $20)
$100,000
Cash
$100,000
Jan.5
Retained Earnings
$80,000
Dividend Payable (40,000 Shares x $2)
$80,000
(Number of Shares Outstanding as on Jan.5 = 45,000 Shares beg - Treasury Stock 5000 = 40,000 shares)
Feb.28
Dividend Payable
$80,000
Cash
$80,000
July.6
Cash (1875 Shares x 24)
$45,000
Treasury Stock (1875 Shares x Cost $20)
$37,500
Additional Paid in Capital from Treasury Stock (Bal. fig.)
$7,500
Aug.22
Cash (3125 Shares x $17)
$53,125
Additional Paid in Capital from Treasury Stock
$7,500
Retained Earnings (Bal. Fig)
$1,875
Treasury Stock (3125 Shares x Cost $20)
$62,500
Sept.5
Retained Earnings
$90,000
Dividend Payable (45,000 Shares x $2)
$90,000
(Number of Shares Outstanding as on Sept.5 = 40,000 shares + 1875 + 3125 = 45,000 Shares)
Oct.28
Dividend Payable
$90,000
Cash
$90,000
Dec.31
Income Summary
$388,000
Retained Earnings
$388,000
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