Kohler Corporation reports the following components of stockholders\' equity on
ID: 2522988 • Letter: K
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 3Explanation / Answer
KOHLER CORPORATION
Stockholders equity section of balance sheet
December 31 2017
**Paid in capital in excess of cost -treasury stock :
1 sale : [29-25]*2063 = 8252
2 sale: [22-25]*3437= -10311 [8252 will be debited to paid in capital in excess of cost -treasury stock and remaining (10311-8252 )= 2059 will be debited to paid in capital in excess of par -common stock
**First dividend : [50000-5500]*2 = 89000
second dividend = [50000-5500+2063+3437]*2]=100000
Retained earning at end = 400000+408000-89000-100000= 619000
KOHLER CORPORATION
Stockholders equity section of balance sheet
December 31 2017
common stock 1,000,000 Paid in capital in excess of par value -common stock [60000-2059] 57941 Total contributed capital 1,057,941 Retained earning 619000 Total stockholders equity 1676941Related Questions
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