Kohler Corporation reports the following components of stockholders’ equity on D
ID: 2595804 • Letter: K
Question
Kohler Corporation reports the following components of stockholders’ equity on December 31, 2015
In year 2016, the following transactions affected its stockholders’ equity accounts.
2.
value:
20.00 points
Required information
Required:
1. Prepare journal entries to record each of these transactions for 2016.
2. Prepare a statement of retained earnings for the year ended December 31, 2016. (Amounts to be deducted should be indicated by a minus sign.)
3. Prepare the stockholders' equity section of the company’s balance sheet as of December 31, 2016.
Common stock—$10 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $ 550,000 Paid-in capital in excess of par value, common stock 70,000 Retained earnings 370,000 Total stockholders’ equity $ 990,000Explanation / Answer
1. Journal entries to record the transactions KOHLER CORPORATION General journal for the year 2016 Date Account Title Debit Credit Jan.1 Treasury stock 75000 Cash 75000 (To record purchase of 5,000 shares of treasury stock @$15 per share ) Jan.5 Dividend 300000 Dividend payable 300000 (To record delcaration of cash dividend of $6 per share on 50,000 shares) Feb.28 Dividend payable 300000 Cash 300000 (To record payment of cash dividend declared on Jan.5) July.6 Cash 35625 Treasury stock 28125 Additional paid-in-capital - treasury stock 7500 (To record reissue of 1,875 shares of treasury stock @$19 per share ) April.29 Cash 37500 Additional paid-in-capital - treasury stock 9375 Treasury stock 46875 (To record reissue of 3,125 shares of treasury stock @$12 per share ) April.29 Additional paid-in-capital - treasury stock Additional paid-in-capital - common stock (To close the balance in additional paid - in - capital -- treasury stock) Sept.5 Dividend 330000 Dividend payable 330000 (To record declaration of dividend @$6 per share on 55,000 shares) Oct.5 Dividend payable 330000 Cash 330000 (To record payment of cash dividend declared on Sept.5) Dec.30 Income summary 408000 Retaiend income 408000 (To record closing of net income to retained earnings) 2. Statement of retained earnings KOHLER CORPORATION Statement of retained earnings as at December 31, 2016 Balance as at January 1, 2016 370000 Net income for the year 408000 Dividends paid -630000 Balance as at December 31, 2016 148000 3.Stockholders' equity section KOHLER CORPORATION Stockholders' equity as at December31, 2016 Common stock - $10 par value, 100,000 shares authorised 550000 55,000 issued and outstanding Paid in capital in excess of par value - common stock 68125 Retained earnings 148000 Total stockholders' equity 766125
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