Kohler Corporation reports the following components of stockholders’ equity on D
ID: 2397966 • 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.
50,000 shares issued and outstanding $ 1,250,000 Paid-in capital in excess of par value, common stock 60,000 Retained earnings 430,000 Total stockholders' equity $ 1,740,000
Explanation / Answer
General Journal Date Account titles & Explanations Debit Credit 1-Jan Treasury Stock 75000 Cash (5000*15) 75,000 5-Jan Retained earnings 270000 Dividends payable 270,000 (50,000-5000)*6 28-Feb Dividends payable 270,000 cash 270,000 6-Jul Cash (1875*19) 35625 Treasury stock (1875*15) 28125 paid in capital in excess-TS 7500 22-Aug Cash (3,125*12) 37500 paid in capital in excess-TS 7,500 Retained earnings 1,875 Treasury stock (3125*15) 46875 5-Sep Retained earnings 300,000 Dividends payable 300,000 (50,000*6) 28-Oct Dividends payable 300,000 cash 300,000 31-Dec Income summary 388,000 Retained earnings 388,000 2) Retained Earnings Beginning balance ,Jan 1 430,000 Add:Net income 388,000 818,000 less:Cash dividend 570000 less:Treasury stock 1,875 Closing balance ,Dec 31 246,125 3) Stockholders Equity section common stock -$20 par value 1,250,000 paid in capital in excess of par value-CS 60,000 total contributed capital 1,310,000 Retained earnings 246,125 total stockholders Equity 1,556,125
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