Kohler Corporation reports the following components of stockholders\' equity on

Question

Kohler Corporation reports the following components of stockholders' equity on December 31, 2015 Common stock-$10 par value, 100,000 shares authorized, 40,000 shares 400,000 60,000 270,000 730,000 issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity In year 2016, the following transactions affected its stockholders' equity accounts Jan. 1 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 Feb. 28 to the Feb. 5 stockholders of record Feb. 28 Paid the dividend declared on January5 Jul. 6 Sold 1,500 of its treasury shares at $24 cash per share Aug. 22 Sold 2,500 of its treasury shares at $17 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 Pa the dividend declared on September5 Dec. 31 Closed the $388,000 credit balance (from net income) in the Income Summary account to Retained Earnings General Journal General Ledger Statement of Stockholders Impact orn Equity Requirement Trial Balance RE Equity In year 2016, the following transactions affected its stockholders equity accounts. Prepare the necessary journal entries. If no journal entry is required, select "No journal entry required" in the first input box

Explanation / Answer

General Journal Date Account titles & Explanations Debit Credit 1-Jan Treasury Stock 80000 Cash (4000*20) 80,000 5-Jan Retained earnings 72000 Dividends payable 72,000 (40,000-4000)*2 28-Feb Dividends payable 72,000 cash 72,000 6-Jul Cash (1500*24) 36000 Treasury stock (1500*20) 30000 paid in capital in excess-TS 6000 22-Aug Cash (2500*17) 42500 paid in capital in excess-TS 6,000 Retained earnings 1,500 Treasury stock (2500*20) 50000 5-Sep Retained earnings 80,000 Dividends payable 80,000 (40000*2) 28-Oct Dividends payable 80,000 cash 80,000 31-Dec Income summary 388,000 Retained earnings 388,000

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