Common stock-$10 par value, 100,000 shares authorized, 40,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity During the current year, the following transactions affected its stockholders' equity accounts. January 2 Purchased 4,000 shares of its own stock at $20 cash per share. January 5 Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders record. February 28 July 6 August 22 September 5 $ 400,000 60,000 270,000 $ 730,000 Paid the dividend declared on January 5. Sold 2,000 of its treasury shares at $24 cash per share. Sold 2,000 of its treasury shares at $16 cash per share. Directors declared a $2 per share cash dividend payable on October 28 to the September 25 stockholders record. October 28 Paid the dividend declared on September 5. December 31 Closed the $388,000 credit balance (from net income) in the Income Summary account to Retained Earning: Required: 1. Prepare journal entries to record each of these transactions. 2. Prepare a statement of retained earnings for the current year ended December 31. stockholders' equity section of the balance sheet as of December 31 of the current year.
Common stock-$10 par value, 100,000 shares authorized, 40,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity During the current year, the following transactions affected its stockholders' equity accounts. January 2 Purchased 4,000 shares of its own stock at $20 cash per share. January 5 Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders record. February 28 July 6 August 22 September 5 $ 400,000 60,000 270,000 $ 730,000 Paid the dividend declared on January 5. Sold 2,000 of its treasury shares at $24 cash per share. Sold 2,000 of its treasury shares at $16 cash per share. Directors declared a $2 per share cash dividend payable on October 28 to the September 25 stockholders record. October 28 Paid the dividend declared on September 5. December 31 Closed the $388,000 credit balance (from net income) in the Income Summary account to Retained Earning: Required: 1. Prepare journal entries to record each of these transactions. 2. Prepare a statement of retained earnings for the current year ended December 31. stockholders' equity section of the balance sheet as of December 31 of the current year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Kohler Corporation reports the following components of stockholders' equity at December 31 of the prior year.
Common stock-$10 par value, 100,000 shares authorized, 40,000 shares issued and outstanding
Paid-in capital in excess of par value, common stock
Retained earnings
Total stockholders' equity
During the current year, the following transactions affected its stockholders' equity accounts.
January 2 Purchased 4,000 shares of its own stock at $20 cash per share.
January 5 Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders of
record.
February 28
July 6
August 22
September 5
$ 400,000
60,000
270,000
$ 730,000
Paid the dividend declared on January 5.
Sold 2,000 of its treasury shares at $24 cash per share.
Sold 2,000 of its treasury shares at $16 cash per share.
Directors declared a $2 per share cash dividend payable on October 28 to the September 25 stockholders of
record.
October 28 Paid the dividend declared on September 5.
December 31 Closed the $388,000 credit balance (from net income) in the Income Summary account to Retained Earnings.
Required:
1. Prepare journal entries to record each of these transactions.
2. Prepare a statement of retained earnings for the current year ended December 31.
3. Prepare the stockholders' equity section of the balance sheet as of December 31 of the current year.
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