Kohler Corporation reports the following components of stockholders’ equity at December 31, 2018.     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 $ 990,000       During 2019, the following transactions affected its stockholders’ equity accounts.   Jan.   2   Purchased 4,500 shares of its own stock at $25 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 1,688 of its treasury shares at $29 cash per share. Aug.   22   Sold 2,812 of its treasury shares at $22 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 Earnings.   Required: 1. Prepare journal entries to record each of these transactions. 2. Prepare a statement of retained earnings for the year ended December 31, 2019. 3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2019.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Kohler Corporation reports the following components of stockholders’ equity at December 31, 2018.
 

 
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 $ 990,000  
 

 
During 2019, the following transactions affected its stockholders’ equity accounts.
 

Jan.   2   Purchased 4,500 shares of its own stock at $25 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 1,688 of its treasury shares at $29 cash per share.
Aug.   22   Sold 2,812 of its treasury shares at $22 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 Earnings.

 
Required:

1. Prepare journal entries to record each of these transactions.
2. Prepare a statement of retained earnings for the year ended December 31, 2019.
3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2019.

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