Question

Kohler Corporation reports the following components of stockholders' equity at December 31, 2018 3.34 points Common stock-$10 par value, 1ee, eee shares authorized, 5e,eee shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $ See, ce 89, eee 43e, eee $1,818,eee BOOK During 2019, the following transactions affected its stockholders' equity accounts. Jan. Jan. Feb. July Aug. Sept. Oct. Dec. 2 Purchased 4,5ee shares of its own stock at $25 cash per share. 5 Directors declared a $4 per share cash dividend payable on February 28 to the February 5 stockholders of record. 28 Paid the dividend declared on January 5. 6 Sold 1,688 of its treasury shares at $29 cash per share. 22 Sold 2,812 of its treasury shares at $22 cash per share. 5 Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record. 28 Paid the dividend declared on September 5. 31 Closed the $388,8ee credit balance (from net income) in the Income Summary account to Retained Earnings. References 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

Answer 1

1
Date	General Journal	Debit	Credit
2-Jan	Treasury stock, Common	112,500		=4500*25
	Cash		112,500
5-Jan	Retained earnings	182,000		=(50000-4500)*4
	Common dividend payable		182,000
28-Feb	Common dividend payable	182,000
	Cash		182,000
6-Jul	Cash	48,952		=1688*29
	Treasury stock, Common		42,200	=1688*25
	Paid-in capital, Treasury stock		6,752
22-Aug	Cash	61,864		=2812*22
	Paid-in capital, Treasury stock	6,752
	Retained earnings	1,684
	Treasury stock, Common		70,300	=2812*25
5-Sep	Retained earnings	200,000		=50000*4
	Common dividend payable		200,000
28-Oct	Common dividend payable	200,000
	Cash		200,000
31-Dec	Income summary	388,000
	Retained earnings		388,000
2
	KOHLER CORPORATION
	Statement of Retained Earnings
	For Year Ended December 31, 2019
	Retained earnings, Dec. 31, 2018	430,000
	Add: Net income	388,000
		818,000
	Less: Cash dividends declared	-382,000
	Less: Treasury stock reissuances	-1,684
	Retained earnings, Dec. 31, 2019	434,316
3
	KOHLER CORPORATION
	Stockholders' Equity Section of the Balance Sheet
	December 31, 2019
	Common stock - $10 par value	500,000
	Paid-in capital in excess of par value, common stock	80,000
	Total contributed capital	580,000
	Retained earnings	434,316
	Total stockholders' equity	1,014,316