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 recond Feb. 28 Paid the dividend declared on January 5 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 Paid the dividend declared on September 5 Dec. 31 Closed the $388,000 credit balance (from net income) in the Income Summary account to Retained Earnings

Explanation / Answer

Impact on equity Amount Total Stockholders' Equity - Dec 31, 2015          730,000 1-Jan Purch. 4,000 Shares - Treasury Stock Stockholders' equity decreased          (80,000) 5-Jan Cash Dividend Declared - $2 X 36,000 Shares Stockholders' equity decreased          (72,000) 28-Feb Paid the Cash dividend No Effect                     -   6-Jul Sold Treasury Stock - 1,500 Shares X $24 Stockholders' equity increased            36,000 22-Aug Sold Treasury Stock - 2,500 Shares X $17 Stockholders' equity increased            42,500 5-Sep Declared Cash Dividend - $2 X 40,000 Shares Stockholders' equity decreased          (80,000) 28-Oct Paid the Cash dividend No Effect                     -   31-Dec Net Income - 2016 Stockholders' equity increased          388,000 Total Stockholders' Equity - Dec 31, 2016          964,500 Statement of Stockholders' Equity Common Stock Paid in Capital in excess of Par, Common Stock Paid in Capital in excess of Par, Treasury Stock Retained Earnings Treasury Stock Total 1-Jan Beginning Balance,         400,000                             60,000            270,000                        -                    730,000 1-Jan Treasury Stock - 4,000 Shares                     -                                        -                          -               (80,000)                  (80,000) 5-Jan Cash Dividend - 36,000 Shares X $2                     -                                        -              (72,000)                        -                    (72,000) 6-Jul Sold Treasury Stock - 1,500 Shares X $24                               6,000               30,000                    36,000 22-Aug Sold Treasury Stock - 2,500 Shares X $17                             (6,000)              (1,500)               50,000                    42,500 5-Sep Cash Dividend - 40,000 Shares X $2            (80,000)                  (80,000) 31-Dec Net Income - 2016            388,000                  388,000 31-Dec Ending Balance         400,000                             60,000                                      -              504,500                        -                    964,500

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