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

Question

Kohler Corporation reports the following components of stockholders' equity on December 31, 2016: Common stock-$20 par value, 100,000 shares authorized, 50,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $1,000,000 60,000 400,000 $1,460,000 In year 2017, the following transactions affected its stockholders' equity accounts Jan. 1 Purchased 5,500 shares of its own stock at $25 cash per share Jan. 5 Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders of record. Feb. 28 Paid the dividend declared on January 5. July 6 sold 2,063 of its treasury shares at $29 cash per share. Aug. 22 Sold 3,437 of its treasury shares at $22 cash per share. Sept. 5 Directors declared a $2 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 $408,000 credit balance (from net income) in the Income Summary account to Retained Earnings 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 Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3

Explanation / Answer

1) Jan-01 Treasury stock-Common (5500*25) 137500 Cash 137500 Jan-05 Retained earnings 89000 Common dividend payable (50000-5500)*2 = 89000 Feb-28 Common dividend payable 89000 Cash 89000 Jul-06 Cash (2063*29) 59827 Paid in capital-Treasury stock 8252 Treasury stock (2063*25) 51575 Aug-22 Cash (3437*22) 75614 Paid in capital-Treasury stock 8252 Retained earnings 2059 Treasury stock-Common (3437*25) 85925 Sep-05 Retained earnings (50000*2) 100000 Common dividend payable 100000 Oct-28 Common dividend payable 100000 Cash 100000 Dec-31 Income summary 408000 Retained earnings 408000 2) STATEMENT OF RETAINED EARNINGS: Retained earnings, Dec. 31, 2016 400000 Add: Net income 4,08,000 8,08,000 Less: Cash dividends declared -1,89,000 Less: Treasury stock reissuances -2,059 Retained earnings, Dec. 31, 2017 6,16,941 3) STOCKHOLDERS' EQUITY SECTON: Common stock - $20 par value, 100000 Shares authorized, 50000 shares issued and outstanding 1000000 Paid-in capital in excess of par value, common stock 60,000 Total contributed capital 1060000 Retained earnings 6,16,941 Total stockholders' equity 16,76,941

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