Problem 11-2A Cash dividends, treasury stock, and statement of retained earnings C3 ⒸP2 P3 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 $400,000 60,000 270,000 Retained earnings Total stockholders' equity $730,000 During the current year, the following transactions affected its stockholders' equity accounts. Jan. 2 Purchased 4,000 shares of its own stock at $20 cash per share. Jan. 5 Directors declared a $2 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 2,000 of its treasury shares at $24 cash per share. Aug 22 Sold 2,000 of its treasury shares at $16 cash per share. Sep. 5 Directors declared a $2 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 $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.
Problem 11-2A Cash dividends, treasury stock, and statement of retained earnings C3 ⒸP2 P3 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 $400,000 60,000 270,000 Retained earnings Total stockholders' equity $730,000 During the current year, the following transactions affected its stockholders' equity accounts. Jan. 2 Purchased 4,000 shares of its own stock at $20 cash per share. Jan. 5 Directors declared a $2 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 2,000 of its treasury shares at $24 cash per share. Aug 22 Sold 2,000 of its treasury shares at $16 cash per share. Sep. 5 Directors declared a $2 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 $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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 11-2A Cash dividends, treasury stock, and statement of retained earnings C3 P2 P3
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
$400,000
60,000
270.000
Retained earnings
Total stockholders' equity
$730,000
During the current year, the following transactions affected its stockholders' equity accounts.
Jan.
2 Purchased 4,000 shares of its own stock at $20 cash per share.
Jan. 5 Directors declared a $2 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 2,000 of its treasury shares at $24 cash per share.
Aug. 22
Sold 2,000 of its treasury shares at $16 cash per share.
Sep.
5 Directors declared a $2 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 $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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