Kohler Corporation reports the following components of stockholders’ equity on D
ID: 2334066 • Letter: K
Question
Kohler Corporation reports the following components of stockholders’ equity on December 31, 2016:
In year 2017, the following transactions affected its stockholders’ equity accounts.
Required:
1. Prepare journal entries to record each of these transactions for 2017.
2. Prepare a statement of retained earnings for the year ended December 31, 2017.
3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2017.
40,000 shares issued and outstanding $ 400,000 Paid-in capital in excess of par value, common stock 60,000 Retained earnings 270,000 Total stockholders' equity $ 730,000
Explanation / Answer
Date General journal Debit Credit 1-Jan Treasury stock 80,000 cash (4000*20) 80,000 5-Jan Retained earnings 72000 Dividends payable 72,000 (40000-4000)*2 28-Feb Dividends payable 72,000 cash 72,000 6-Jul Cash (1,500*24) 36000 Treasury stock (1,500*20) 30000 paid in capital in excess of Treasury stock 6000 22-Aug Cash (2500*17) 42500 paid in capital in excess of par -TS 6,000 Retained earnings 1,500 Treasury stock (2500*20) 50000 5-Sep Retained earnings 80000 Dividends payable (40000*2) 80,000 28-Oct Dividends payable 80,000 cash 80,000 31-Dec Income summary 388,000 Retained earnings 388,000 Statement of retained earnings opening balance ,jan 1 270,000 add :Net income 388,000 658,000 less:Cash Dividend 152000 Treasury stock 1,500 Closing balance,Dec 31 504,500 Stockholders Equity section of the Balance Sheet common stock 400,000 paid in capital in excess of par-CS 60,000 total contributed capital 460,000 Retained earnings 504,500 total Stockholders Equity 964,500
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