Kohler Corporation reports the following components of stockholders’ equity on D
ID: 2459849 • Letter: K
Question
Kohler Corporation reports the following components of stockholders’ equity on December 31, 2013:
Common stock—$20 par value, 100,000 shares authorized, 45,000 shares issued and outstanding $ 900,000
Paid-in capital in excess of par value, common stock 80,000
Retained earnings 430,000
Total stockholders’ equity $ 1,410,000
In year 2014, the following transactions affected its stockholders’ equity accounts.
Jan. 1 Purchased 5,500 shares of its own stock at $20 cash per share.
Jan. 5 Directors declared a $4 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record.
Feb. 28 Paid the dividend declared on January 5.
July 6 Sold 2,063 of its treasury shares at $24 cash per share.
Aug. 22 Sold 3,437 of its treasury shares at $17 cash per share.
Sept. 5 Directors declared a $4 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 $428,000 credit balance (from net income) in the Income Summary account to Retained Earnings.
Prepare journal entries to record each of these transactions for 2014
Prepare a statement of retained earnings for the year ended December 31, 2014.
Prepare the stockholders' equity section of the company’s balance sheet as of December 31, 2014.
Prepare journal entries to record each of these transactions for 2014
Prepare a statement of retained earnings for the year ended December 31, 2014.
Prepare the stockholders' equity section of the company’s balance sheet as of December 31, 2014.
Explanation / Answer
1. Journal Entries
Retained earning:
3. Shareholder's equity section as on 31 dec 2014
Common stock,39500 shares at par value of $20 $790000
Add: Paid-in capital in excess of par value, common stock $88252
Less: Discount on issue of shares $10311
Add: Reatined earning $858000
Clsoing balance $1725941
Date Particulars Debit Credit Jan 1 Common stock 110000 To cash 110000 Jan 5 No entry Jan Dividend (39500*4) 158000 To cash 158000 July 6 Cash (2063*24) 49512 To Common stock (2063*20) 41260 To securities premium 8252 July 22 Cash (3437*17) 58429 Discount (3437*3) 10311 To common stock (3437*20) 68740 Sep 5 no entry Oct 28 Dividend (39500*4) 158000 To Cash 158000 Dec 31 Profit & loss 428000 To retained earning 428000Related Questions
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