[The following information applies to the questions displayed below.] Kohler Cor

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[The following information applies to the questions displayed below.] Kohler Corporation reports the following components of stockholders' equity on December 31, 2013: 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 $1,000,000 80,000 460,000 Total stockholders' equity $1,540,000 In year 2014, the following transactions affected its stockholders' equity accounts. Jan. Jan. 1 5 Purchased 5,500 shares of its own stock at $15 cash per share 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. Paid the dividend declared on September 5. Closed the $408,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Oct. 28 Dec. 31

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit Aug 12 Cash (3437*12) 41244 Paid in capital from sale of treasury stock 8252 Retained earnings 2059 Treasury stock (3437*15) 51555 (To record treasury stock reissue) Sep 05 Dividend (50000*4) 200000 Dividend payable 200000 (To record dividend declared)

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