7 points $825,eee cash dividend payable on February 28 to the February 5 lders o

Question

7 points $825,eee cash dividend payable on February 28 to the February 5 lders of July 6 Sold 1,875 of its treasury shares at $19 cash per share Aug. 22 Sold 3,125 of its treasury shares at $12 cash per s declared a $6 per share cash dividend payable on October 28 to the September 25 stockholders of record Dec. 31 Closed the $388,088 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 Complete this question by entering your answers in the tabs below

Explanation / Answer

Answer a. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1-Jan Treasury Srock                                                          Dr.            75,000 5,000 Shares X $15 To Cash            75,000 5,000 Shares X $15 (record the purchase of treasury stock) 5-Jan Retained Earnings                                                  Dr.          300,000 50,000 shares X $6 To Cash Dividend Payable          300,000 50,000 shares X $6 (Record the dividend declared) 5-Feb No Entry 28-Feb Cash Dividend Payable                                        Dr.          300,000 To Cash          300,000 (record the dividend paid) 6-Jul Cash                                                                             Dr.            35,625 1,875 Shares X $19 To Treasury Stock            28,125 1,875 Shares X $15 To Paid-in Capital in Excess of Par - Treasury              7,500 1,875 Shares X $4 (record the sale of treasury stock) 22-Aug Cash                                                                             Dr.            37,500 3,125 Shares X $12 Paid-in Capital in Excess of Par - Treasury   Dr.              7,500 Retained Earnings                                                  Dr.              1,875 $46,875 - ($37,500 + $7,500) To Treasury Stock            46,875 3,125 Shares X $15 (record the sale of treasury stock) 5-Sep Retained Earnings                                                  Dr.          330,000 55,000 shares X $6 To Cash Dividend Payable          330,000 55,000 shares X $6 (Record the dividend declared) 28-Oct Cash Dividend Payable                                        Dr.          330,000 To Cash          330,000 (record the dividend paid) 31-Dec Income Summary                                                   Dr.          388,000 To Retained Earnings          388,000 (record the closing entry of Income Statement) Answer b. Kohler Corporation Statement of Retained Earnings For the Year Ended Dec. 31, 2017 Beginning Balance - Jan 1, 2017           400,000 Add: Net Income           388,000 Balance           788,000 Less: Cash Dividend Declared: Jan-5 - $6 X 50,000 Shares         (300,000) Sep-5 - $6 X 55,000 Shares         (330,000)         (630,000) Less: Treasury Stock              (1,875) Ending Balance - Dec 31, 2017           156,125 Answer c. Kohler Corporation Balance Sheet (Partial) For the Year Ended Dec. 31, 2017 Stockholders Equity Paid in Capital Common Stock - $15 Par Value, 100,000 Shares Authorized, 55,000 Shares Issued & Outstanding           825,000 Paid in Capital in Excess of Par - Common              70,000 Total Paid in Capital           895,000 Retained Earnings           156,125 Total Stockholders' Equity        1,051,125

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.