Kohler Corporation reports the following components of stockholders’ equity on D
ID: 2582530 • Letter: K
Question
Kohler Corporation reports the following components of stockholders’ equity on December 31, 2016: 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 80,000 Retained earnings 370,000 Total stockholders' equity $ 1,350,000 In year 2017, the following transactions affected its stockholders’ equity accounts. Jan. 1 Purchased 5,000 shares of its own stock at $15 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 6 Sold 1,875 of its treasury shares at $19 cash per share. Aug. 22 Sold 3,125 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 $388,000 credit balance (from net income) in the Income Summary account to Retained Earnings.
Explanation / Answer
JOURNAL
Date
Account
Debit
Credit
Jan. 1
Treasury Stock
$75,000
Cash
$75,000
(Purchase of 4,500 shares @ $15 each)
Jan. 5
Retained Earnings
$1,60,000
Dividends Payable
$1,60,000
(Dividend declared at $4 per share on 40,000 shares)
Feb. 28
Dividends Payable
$1,60,000
Cash
$1,60,000
(Paid dividends)
July. 6
Cash
$35,625
Treasury Stock
$28,125
Paid in capital - Treasury
$7,500
(Sold 1875 shares from treasury stock at $19 - Cost $15 per share)
Aug. 22
Cash
$37,500
Paid in capital - Treasury
$7,500
Retained Earnings
$1,875
Treasury Stock
$46,875
(Sold 3125 shares from treasury stock at $12 - Cost $15 per share)
Sept. 5
Retained Earnings
$1,80,000
Dividends Payable
$1,80,000
(Dividend declared at $4 per share on 45,000 shares)
Oct. 28
Dividends Payable
$1,80,000
Cash
$1,80,000
(Paid dividends)
Dec. 31
Income Summary
$3,88,000
Retained Earnings
$3,88,000
(Transfer of net income to retained earnings)
JOURNAL
Date
Account
Debit
Credit
Jan. 1
Treasury Stock
$75,000
Cash
$75,000
(Purchase of 4,500 shares @ $15 each)
Jan. 5
Retained Earnings
$1,60,000
Dividends Payable
$1,60,000
(Dividend declared at $4 per share on 40,000 shares)
Feb. 28
Dividends Payable
$1,60,000
Cash
$1,60,000
(Paid dividends)
July. 6
Cash
$35,625
Treasury Stock
$28,125
Paid in capital - Treasury
$7,500
(Sold 1875 shares from treasury stock at $19 - Cost $15 per share)
Aug. 22
Cash
$37,500
Paid in capital - Treasury
$7,500
Retained Earnings
$1,875
Treasury Stock
$46,875
(Sold 3125 shares from treasury stock at $12 - Cost $15 per share)
Sept. 5
Retained Earnings
$1,80,000
Dividends Payable
$1,80,000
(Dividend declared at $4 per share on 45,000 shares)
Oct. 28
Dividends Payable
$1,80,000
Cash
$1,80,000
(Paid dividends)
Dec. 31
Income Summary
$3,88,000
Retained Earnings
$3,88,000
(Transfer of net income to retained earnings)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.