The following information applies to the questions displayed below.] Kohler Corp
ID: 2567319 • Letter: T
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-$20 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 $1,000,000 70,000 430,000 $1,500,000 In year 2016, the following transactions affected its stockholders' equity accounts. Jan. 1 Purchased 5,500 shares of its own stock at $15 cash per share Jan. 5 Directors declared a $4 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 2,063 of its treasury shares at $19 cash per share. Aug. 22 Sold 3,437 of its treasury shares at $12 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 $408,000 credit balance (from net income) in the Income Summary account to Retained EarningsExplanation / Answer
The following is the statement of retained earnings of Kohler Corporation:
note: dividends declared are calculated below:
On Jan 5 =>$4 per share on (50,000 out standing - 5,500 repurchase =>44,500)
=>$178,000.
ON sept 5 , $4 per share on (44,500 + 2,063 + 3,437=>50,000 shares).
=>50,000 *$4 =>$200,000.
Total dividends declared = $178,000 + $200,000 =>$378,000.
Treasury stock reissuances=> deficit of ($15 -12)=>$3 per share on 3,437 shares is to be set off initially from the surplus collected on 2,063 shares @($19-15=>$4 per share), remaining is to be charged from retained earnings, as calculated below.
= [3437 shares * ($15 - 12)] + [2,063*(15-19)]
=>$2,059.
Retained earnings, Dec 31,2015 $430,000 Add: Net income 408,000 838,000 Less: Cash dividend declared (see note) (378,000) Less: Treasury stock Issuance (see note) (2,059) Retained earnings, Dec 31,2016 457,941Related Questions
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