Kohler Corporation reports the following components of stockholders' equity at December 31, 2019. Common stock-$25 par value, 100,000 shares authorized, 45,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $ 1,125,000 80,000 400,000 $ 1,605,000 During 2020, 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 $4 per share cash dividend payable on February 28 to the February 5 stockholders of record. February 28 Paid the dividend declared on January 5. July 6 Sold 1,500 of its treasury shares at $24 cash per share. August 22 Sold 2,500 of its treasury shares at $17 cash per share. September 5 Directors declared a $4 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 year ended December 31, 2020. 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2020.
Kohler Corporation reports the following components of stockholders' equity at December 31, 2019. Common stock-$25 par value, 100,000 shares authorized, 45,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $ 1,125,000 80,000 400,000 $ 1,605,000 During 2020, 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 $4 per share cash dividend payable on February 28 to the February 5 stockholders of record. February 28 Paid the dividend declared on January 5. July 6 Sold 1,500 of its treasury shares at $24 cash per share. August 22 Sold 2,500 of its treasury shares at $17 cash per share. September 5 Directors declared a $4 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 year ended December 31, 2020. 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2020.
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, 2019.
Common stock-$25 par value, 100,000 shares authorized, 45,000
shares issued and outstanding
Paid-in capital in excess of par value, common stock
Retained earnings
Total stockholders' equity
$ 1,125,000
80,000
400,000
$ 1,605,000
During 2020, 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 $4 per share cash dividend payable on February 28 to the February 5 stockholders of
record.
February 28 Paid the dividend declared on January 5.
July 6 Sold 1,500 of its treasury shares at $24 cash per share.
August 22 Sold 2,500 of its treasury shares at $17 cash per share.
September 5 Directors declared a $4 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 year ended December 31, 2020.
3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2020.
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